One should be ready with trailing stops for the stocks which are trading near their Stop Loss levels. Don’t hesitate to cut the position at a small loss, it will in-fact help you preserve your capital.
|
Capital Loss |
% gain required to recover the loss |
|
20% |
25% |
|
30% |
43% |
|
40% |
67% |
|
50% |
100% |
|
60% |
150% |
The table above shows how much your account gain to recover the loss, for illustration, if you want to recover the 50% loss on your capital, you need 100% gain on the rest of the capital just to recover your loss and come back to starting capital. The only way to manage big loss is to cut the positions when losses are small!
Happing Investing! 😊
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