http://www.thestockbandit.net/2006/10/16/cash-position/ Trading blog with trading insights, discussion on swing trading, day trading, and trading psychology. Fri, 16 May 2008 04:12:09 +0000 http://wordpress.org/?v=2.0.9 http://www.thestockbandit.net/2006/10/16/cash-position/#comment-32029 Wed, 24 Oct 2007 23:48:23 +0000 http://www.thestockbandit.net/2006/10/16/cash-position/#comment-32029 [...] For one, it will free up cash which can be used for other trading ideas. If your capital is tied up in a trade in which you are wrong (losing), you are suffering opportunity losses. A cash position is better than a losing position (and cash IS a position). Other stocks could be showing you a gain, so consider at least partial sales to free up cash for new ideas, possibly even on the flip side. [...] […] For one, it will free up cash which can be used for other trading ideas. If your capital is tied up in a trade in which you are wrong (losing), you are suffering opportunity losses. A cash position is better than a losing position (and cash IS a position). Other stocks could be showing you a gain, so consider at least partial sales to free up cash for new ideas, possibly even on the flip side. […]

]]> http://www.thestockbandit.net/2006/10/16/cash-position/#comment-5856 Thu, 22 Mar 2007 17:50:38 +0000 http://www.thestockbandit.net/2006/10/16/cash-position/#comment-5856 [...] There’s no incredible magic about how clean or ‘tight’ the pattern itself is in terms of reliability, but there is some real substance in knowing exactly at which point in time you should be IN or OUT of a trade. That is of course derived from the chart pattern itself. A breakdown from a well-defined bull flag or ascending triangle pattern gives me a specific exit plan, and that puts me well ahead of the curve by telling me it’s time to step aside and move to cash, or simply shift those funds into a new setup. [...] […] There’s no incredible magic about how clean or ‘tight’ the pattern itself is in terms of reliability, but there is some real substance in knowing exactly at which point in time you should be IN or OUT of a trade. That is of course derived from the chart pattern itself. A breakdown from a well-defined bull flag or ascending triangle pattern gives me a specific exit plan, and that puts me well ahead of the curve by telling me it’s time to step aside and move to cash, or simply shift those funds into a new setup. […]

]]> http://www.thestockbandit.net/2006/10/16/cash-position/#comment-4273 Sat, 27 Jan 2007 19:02:34 +0000 http://www.thestockbandit.net/2006/10/16/cash-position/#comment-4273 [...] How ironic! He failed to mention that a long-term investor such as himself can indeed suffer considerable losses during a market correction, especially considering how few are hedged or short selling the way most day traders do. It’s also interesting to note that his long-term investors can be at greater risk than a day trader during a downturn, especially considering that they are mostly invested at all times and a day trader can take a position in cash (thereby preserving capital, not losing it). [...] […] How ironic! He failed to mention that a long-term investor such as himself can indeed suffer considerable losses during a market correction, especially considering how few are hedged or short selling the way most day traders do. It’s also interesting to note that his long-term investors can be at greater risk than a day trader during a downturn, especially considering that they are mostly invested at all times and a day trader can take a position in cash (thereby preserving capital, not losing it). […]

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