Capital preservation: The recovery table
IT players divided and distributed their risk exposures in the virtual stock trading game.
trading strategy that essentially control risk exposure to the minimum in order to limit possible losses to the minimum, too. The other, as used by the other three, - posures to maximize the potential
As applied, one investment risk in total disregard of the tenet on capital preservation.
There are three essential parts of successful trading. These are, a correct grasp of market psychology, effective use of a logical trading system ( fundamental analysis, charting, technical analysis and the like) and good money management.
These three elements that should essentially be made to play in the trade. Like a stool, according to my favorite investing mentor and stock market trader, “remove one
- agement is that if properly struc bankrupt and kicked out of the game in a string of losses.
You can see this point as especially applied by Play Hard. Play Hard is keeping his risk exposures of total capital.
The other model, as used by the other three, is aggressively applied. Investments are not divided in small amounts and broken into small risks but in big chunks as to
When he entered the market for in NOW Corporation ( NOW). This totally put aside the principle of capital preservation, an integral part of money management.
on Friday, March 9, NOW closed - -
March 14, the price of NOW has has not sold his position yet, his paper loss has further deteriorated
In my early years in the market, I tended to focus on potential profits rather than on possible unbridled thoughts of potential gains on the stocks I picked up that
back of my mind.
But, as I have learned the hard trader digs deep into all the nega risk and recovery prospects of his trades.
Like I have further learned, trade losses that eventually determine our success in the market.
or affect any of the other players, in order to recover certain levels
What does the table tell us? The percent gain needed to recover a loss increases almost exponentially. Capital preservation, therefore, is of utmost importance! Play Hard sold out his shareholdings in PXP Energy Corp. on Wednesday, March 14, “to cut loss” as he stated.
share price of PXP had been sliding since he bought it.
submitted a “buy” order for MRC Allied, Inc. (MRC) for execution picked up by Play Hard as early trading game on Thursday, March about its chances of becoming the local counterpart for the third telco player to be named by the government.
MRC’s share price as of the close of trading on Wednesday, March - per share. of chart readers and technical analysts are forecasting that MRC this time? As has been stated, market tips can be as harmful as they have not yet traded since the beginning of the game.
Expect the full report for the sec- Den Somera is a licensed stockbroker. The article has been prepared for general circulation for the reading public and must not be construed as an offer, or solicitation of an offer to buy or sell any securities or financial