I generally try to buy and sell in 3 tranches. After buying the first tranche, if the stock moves in expected direction, I add two more times after around 10% rise each. If the movement is not as per expectation, stop loss gets triggered. After the acquisition, I always try to place a trailing stop loss which is revised upwards in every 1-2 weeks or stay the same as per the stock’s movement. After the previous support is breached, first stop loss gets triggered and after each 5% fall, SL2 and SL3 gets triggered. After buying a stock, we generally develop an affinity towards the stock and selling it after surrendering paper gains is really difficult. So I try to make the process as automated as possible. The process is not perfect and will never be. We all need to learn and implement continuously.
It is quite helpful for someone if he/she has an alternate profession and don’t need to depend on the markets for daily expenses. Let the market decide when it wants to throw us out.
@Nickp
Some people are really objective towards evolving macro and change decisions accordingly. For the rest of us, macro makes our views biased and create a self reinforcing negative feedback loop.
Moreover, macro is subjective and can’t be quantified. Two months ago, we all were impressed by the power of LLMs and the kind of productivity gain it would bring in the white collar professions. AI was expected to lead us to the next information age. Right now, we all are worried about an impending crash in China because of the signs like housing bubble, population decline, high youth unemployment etc. If China really performs bad, it would send shockwaves across the globe. Whether one is a pessimist or an optimist, one can always find data to support and reinforce that particular view point.
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