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Simulated leverage
I’ve been trying to simulate leverage by going all-in. I reason the larger position size has similar P&L impact as a levered account. This makes up for the fact that I can’t access leverage for various reasons. My experience with this strategy is a drastic reduction in the number of trades that I take. For better or for worse, I have become more picky, definitely more fearful of losses. Today, I am foregoing a bunch of stocks that have broken out on good volume and good RSI. The reasons: • Their bases are in 3rd base with loose price action relative to when their run-up occurred earlier in the year. • The broad market where I live is in a multi-month correction without any strong catalysts on the horizon. • My capital got caught in an extended stock and I haven’t let go because of a decent narrative in the fundamentals. It hasn’t broken key levels yet as well. But the correction and consolidation at the lows is excruciating. I guess I’m here to vent. I know this style is a deviation from textbook recommendations. But it’s one of the adjustments I have to make just so my trading becomes viable, especially since I trade in a mean-reverting EM with no tech stories. It’s hard on the psyche. Dealing with fear then FOMO in a span of days. Hope you guys could share your stories too. :)1
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