{"id":49,"date":"2013-01-22T15:49:58","date_gmt":"2013-01-22T10:19:58","guid":{"rendered":"https:\/\/tradesmartonline.in\/blog\/?p=49"},"modified":"2013-01-22T15:49:58","modified_gmt":"2013-01-22T10:19:58","slug":"smart-trade-rule-2","status":"publish","type":"post","link":"https:\/\/designingprojectmanagement.com\/blog\/smart-trade-rule-2\/","title":{"rendered":"Smart Trade Rule #2"},"content":{"rendered":"<p><strong><img decoding=\"async\" class=\"alignleft wp-image-38\" title=\"Read Me\" src=\"https:\/\/tradesmartonline.in\/blog\/wp-content\/uploads\/2013\/01\/attention-2.jpg\" alt=\"attention 2\" width=\"100\" height=\"100\" \/>#TradeSmart Rule No. 2<\/strong><\/p>\n<p><strong><br \/>\n&#8220;Never average losing Trades&#8221;.<\/strong><\/p>\n<p>&nbsp;<\/p>\n<h3><strong>How many times have your position gone against you?<\/strong><\/h3>\n<p>You planned and executed your trade correctly, yet soon after you bought price goes for a toss. You have three ways ahead<\/p>\n<p><img decoding=\"async\" class=\"alignleft wp-image-54\" title=\"Position\" src=\"https:\/\/tradesmartonline.in\/blog\/wp-content\/uploads\/2013\/01\/image00.jpg\" alt=\"dice question mark\" width=\"100\" height=\"60\" \/><\/p>\n<ul>\n<li>Hold on with your position and wait for the prices to regain<\/li>\n<li>Cut your position in loss<\/li>\n<li>Average or buy some more as it is cheaper than before<\/li>\n<\/ul>\n<p>One can also hold on to his position but its advisable to cut position in time before a significant amount of capital is vanished.<\/p>\n<p>But in most of the cases people tend to opt for the last option. They average out their position to reduce the buying cost in hope that prices will soon take a U turn. This approach can work at times, but is very risky.<\/p>\n<p style=\"text-align: left;\">Let us take an example:<br \/>\nBuy one lot of Nifty @ Rs 5895<img fetchpriority=\"high\" decoding=\"async\" class=\"aligncenter wp-image-53\" title=\"Nifty Spot\" src=\"https:\/\/tradesmartonline.in\/blog\/wp-content\/uploads\/2013\/01\/image02-300x198.jpg\" alt=\"image02\" width=\"300\" height=\"198\" \/><br \/>\nand average with same qty twice<br \/>\n@ Rs 5800<br \/>\n@ Rs 5750<br \/>\nso the average price = Rs 5815<br \/>\nSuppose we square up @ Rs 5500<\/p>\n<p>Loss without averaging = (5500-5895) x 50= Rs\u00a0-19750<\/p>\n<p>Loss with averaging= (5500-5815) x 150= Rs-47250<\/p>\n<p><span style=\"line-height: 1.714285714; font-size: 1rem;\">Moreover how rational it is to repeat a mistake once already committed? Then why we do the same with our investments?<\/span><\/p>\n<p><a class=\"action_button\" style=\"background-color: #00baf5; box-shadow: 3px 3px #888888; color: #ffffff; display: inline-block; font-family: sans-serif; font-size: 16px; line-height: 25px; text-align: center; text-decoration: none; width: 250px; -webkit-text-size-adjust: none; mso-hide: all; margin-left: 35%;\" href=\"https:\/\/tradesmartonline.in\/\" target=\"_blank\" rel=\"noopener noreferrer\"><strong>Open Lowest Brokerage<\/strong><br \/>\n<strong> Trading Account Now<\/strong><\/a><\/p>\n<p><strong>Also Read : <\/strong><a href=\"https:\/\/tradesmartonline.in\/blog\/smart-trade-rule-1\/\" target=\"_blank\" rel=\"noopener noreferrer\">#TradeSmart Rule No.1<\/a><\/p>\n<p>Let your profits compound, not losses!<br \/>\nBe Smart, Trade Smart !<\/p>\n<p><strong>[email-subscribers namefield=&#8221;NO&#8221; desc=&#8221;Subscribe now to get latest updates!&#8221; group=&#8221;Public&#8221;]<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"<p>#TradeSmart Rule No. 2 &#8220;Never average losing Trades&#8221;. &nbsp; How many times have your position gone against you? You planned and executed your trade correctly, yet soon after you bought&#8230;<\/p>\n","protected":false},"author":1,"featured_media":5068,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[20],"tags":[21,6,7,8],"class_list":["post-49","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-smart-trading-guidelines","tag-never-average-losing-trades","tag-trading-rules","tag-trading-services","tag-trading-tips"],"_links":{"self":[{"href":"https:\/\/designingprojectmanagement.com\/blog\/wp-json\/wp\/v2\/posts\/49"}],"collection":[{"href":"https:\/\/designingprojectmanagement.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/designingprojectmanagement.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/designingprojectmanagement.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/designingprojectmanagement.com\/blog\/wp-json\/wp\/v2\/comments?post=49"}],"version-history":[{"count":0,"href":"https:\/\/designingprojectmanagement.com\/blog\/wp-json\/wp\/v2\/posts\/49\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/designingprojectmanagement.com\/blog\/wp-json\/wp\/v2\/media\/5068"}],"wp:attachment":[{"href":"https:\/\/designingprojectmanagement.com\/blog\/wp-json\/wp\/v2\/media?parent=49"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/designingprojectmanagement.com\/blog\/wp-json\/wp\/v2\/categories?post=49"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/designingprojectmanagement.com\/blog\/wp-json\/wp\/v2\/tags?post=49"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}