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?

Four Oil Giants to Keep an Eye on - Barron's

Crude Oil Trader: "With Exxon being such a large percentage of the DOW it is likely to drag the whole index down Friday."

Well possible, but the Q4 GDP figure might throw a wrench in the scenario. Consensus expectations seem to be edging down on an almost daily basis, so it's now quite possible that a horrendous 'minus four point something' will be greeted with euphoria as an 'upside miss' (only to be adjusted down next month, of course).