www.guerillastocktrading.com Whilst we’ve been kept awake at night wetting our sushi pajamas for horror of losing trades and jumping off our abode, nearly all losing trades come from misconceptions born inside our brains. This is how the majority of losing trades go down: 1 – Double down. Whatever moron came up with this idea had to be a chap with a lot of money. The earliest hypothesis of doubling down must have come from some intoxicated well-off chap in Las Vegas playing at the MGM Grand Hotel and Casino. The hypothesis of doubling down is straightforward, if a stock you are hanging on to falls 20% in value, acquire double what you first bought. Over time, as poverty-stricken common folk got their hands on the theory, it changed into averaging down, meaning purchasing any extra amount of a stock that you are hanging on to when it drops 15 % or more. Villainous stock trader Nick Leeson perfected the skill of averaging down into losing trades, or so he thought. This double down stock trading mastermind caused the collapse of Barings Bank, United Kingdom’s oldest investment bank, for which he was sent to jail. Never fling good money after bad. Never risk more than you are seeking to gain. 2 – Value investing. This strategy must be the brain spawn of wicked institutional traders who hope the stupid common folk will help them in dumping their longs in a down trending stock market. The idea of value investing is straightforward, look at the P/E ratio. If the average P/E …

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Market analysis of the S&P500 and our Iron Condor options trades, plus other swing trade strategies, from www.optionslinebacker.com

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