Normal
Risk nowadays can be pre-set, especially with guaranteed stops.I have never been a fan of divesification, to me it just means that you will never make a big capital gain.Always diluting your big winners.Thinking negatively, yes it will dilute your losers, but so what.If I had $50,000 to trade with I could buy $50,000 worth of XYZ stock with a stop loss of 2% so the most I can lose is $1,000.This is my total risk.If the stock as hoped goes up, you could place the stop at breakeven very quickly, this then is a no risk trade (impossible to lose money, only breakeven or gain).You could then buy more stock (compound) as the price ticks up, this can be calculated with a trailing stop to again, never have any risk of losing any capital.I am not advocating using all funds on one share, but the theory is still the same.Risk is always there but in this market we can calculate risk exactly if we wish.
Risk nowadays can be pre-set, especially with guaranteed stops.
I have never been a fan of divesification, to me it just means that you will never make a big capital gain.Always diluting your big winners.Thinking negatively, yes it will dilute your losers, but so what.
If I had $50,000 to trade with I could buy $50,000 worth of XYZ stock with a stop loss of 2% so the most I can lose is $1,000.This is my total risk.If the stock as hoped goes up, you could place the stop at breakeven very quickly, this then is a no risk trade (impossible to lose money, only breakeven or gain).You could then buy more stock (compound) as the price ticks up, this can be calculated with a trailing stop to again, never have any risk of losing any capital.
I am not advocating using all funds on one share, but the theory is still the same.Risk is always there but in this market we can calculate risk exactly if we wish.
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