Adding to Winners
Unless you want to blow your account, please do yourself a favor and only add to stocks that are already winning.
This is another discipline I’m slowly starting to experiment with recently. I have been burned too many times adding to the dip, that I figured I oughta change how I’m protecting my account.
And adding to winners is a great way to mitigate risk if the stock goes against you.
It feels like a relief to be wrong and not lose too much money.
If you understand that losing is part of the game, you shift your focus to managing the losses. Specifically, to minimize the amount as much as you can, while continuing to trade with a carefree mindset.
When you’ve got a winner, then it pays well to add, especially when the move is just getting started.
And this goes back to the mindset of reacting vs predicting. It proves you are making decisions that are based on hard facts when you get confirmation of your thesis.
You become more convicted!
Happy Trading,
Peace