Trading down to breakeven?

>>1686528
if you think it will rise then yeah. it might be throwing good money after bad, but it does lessen the recovery needed to breakeven. whether the recovery comes is the gamble.

>>1686528
http://www.investopedia.com/terms/v/valuetrap.asp

Well, it depends on the reason of the drop. If you follow small cap companies extensively, you'll see a lot of purchase opportunities arising. 5% drops, even when there are no news or changes. 5% increases just because of an article in the papers or a press conference.

If you thought it was okay to buy in at $5, and nothing has changed, you should be buying with both hands at $0.5. In that case the fundamentals are the same, but the price is better.

http://www.investopedia.com/terms/f/fundamentals.asp

>>1686528
If it dropped 90%, there's something fundamentally wrong with the companyt/security. It hurts but you should probably sell since it may only drop further. If it goes back to $5/share, it will take a long time (most likely a few years, if ever). You need to take a loss instead of loosing more. Been through this shit multiple times. It sucks but be more careful next time and don't buy shit companies in the hopes of making a lot of money. Small and steady wins the fucking race.

>>1686558
/thread

>>1686769
>If it dropped 90%, there's something fundamentally wrong with the companyt/security. It hurts but you should probably sell since it may only drop further
Well, thinking like this is the reason why a 5% turn to 10%, which in turn releases EVERY stop loss of any person. Next stop: bottom.

Human mentality dictates stock prices, not a formula or fundamentals. Sure, for most stocks, and then large cap companies especially, they are studied enough to have the price relate very well, but most investors let feelings and gut steer their actions.

>>1686833
>Well, thinking like this is the reason why a 5% turn to 10%
No, it really has more to do with available time. Lots of people aren't going to stick around for years waiting for the stock to rebound, they have better things to do with their money. If they have better options, whether they be stocks or other investments, it's sort of ridiculous to expect them to stay put in order to keep the price propped up.

You should look at a stochastic oscillator and determine if the stock is going to swing back up. Most of my buys are stocks that have fallen 5-20%, over 1mil volume, and oversold stochastic. The fundamentals don't really matter as much in huge panic selling moments. Especially if the stock price is sub 0.30$, one or two sellers/buyers can shock the price more than any news. If you've lost >90% of your money on a single trade theres really no reason not to hold since your not getting nothing selling it now..

>>1686841
I wasn't really thinking about year-long decline, but it doesn't matter.

So what if the price is declining year after year? If the business is good, it still doesn't matter. All you get is a larger stake in it for less cost.

Come to think of it, it's actually better, as your opportunities to buy a part of it is increased, since you can apply multiple salaries.

>>1687034
>If the business is good
But they're not always good, and you can't always tell.
If you hold indefinitely, you can wind up with nothing when they declare bankruptcy, a possibility some people aren't willing to risk.

>>1686558
>but it does lessen the recovery needed to breakeven

shouldn't matter

what matters is whether it is a good investment not whether you break even on any individual trade

agree with your other point though