OldLimey

Bullish or Bearish, And Why?

When I started life on an FX trading desk the first thing I was told was that the quickest way to the exit was to add to a losing trade. On the other hand, I don't doubt that some people would say that if you liked CAT at 42 you should love it at 31-32.

Personally - and trading is a very personal thing - in your position I would do two things:

1. With the money you've already got in CAT: bearing in mind any transaction costs, I'd ask myself what else I could now be doing with that money and why I think that would be a better bet than leaving it where it is. (The fact you bought CAT at 42 is now irrelevant. The fact that you believe it might go back to 42 may not be - it all depends on what else might do better from here.)

2. With any new money: the analysis is actually the same, but with half the transaction costs missing. CAT is just one alternative - you have to evaluate them all and set expectations for each within your own risk-reward parameters.


On Feb 05 12:17 PM User 351620 wrote:

> I bought caterpillar at $42. I don't intend to sell. should I buy
> more at $31-$32?

Let's Just Say It: Print More Money

Mr. McCoy: Why limit yourself to printing? Why not go all the way and get a constitutional amendment enshrining the right to bubbles?