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Thursday, November 19, 2009

Balls of Steel

I know that you should not double down on a losing trade. But how do you know if a trade is a losing trade? Because the price movement goes against you initially, does not necessarily mean it was a losing trade.

I like to reference the game of black jack once in a while.

Let's say you have 11 and dealer has face card showing. You double down and got a 2. You have the opportunity to surrender and lose half the wager amount. Do you, would you?

The card underneath turns out to be 6, dealer draw 10 and busted.

Here are the charts for TWM.

I have tweeted - I will sell #TWM for loss when #IWM close above 61.57.

Would you have double down? Do you have balls of steel?

FYI: I did not double down, never saw it, but it's 28.19% of my one IRA account.
May be I should have only invested 5% of account to start with.