Investor Questions: Repairing Losing Ultra Short SDOW Trade To Profits In The Trump Rally – Mar 5 2017

Repairing losing SDOW ETF trade and return to profits

When an investor decides that a bullish run in stocks is either overdone or could result in a snap pullback often they will judge the time as right to buy a protective product such as the SDOW Ultra Short Dow 30 ETF.

This product attempts to provide results that are three times (3X) the daily performance of the Dow Jones Index. That means in theory that if the Dow Jones Index were to fall 1%, this ETF would rise 3%. If the Dow Jones rose 1% this ETF would fall 1%.

A question posted by an investor looks at how to repair a trade where SDOW shares were bought at the start of the Trump rally in anticipation of the market falling. Instead the market has continued to climb which is eroding the capital at risk and could result in the investor losing a large portion of the capital being risked in this trade.

One thing I hate is taking a loss on any trade. Taking losses slows the growth of a portfolio as the investor must recover the loss before continuing to grow the portfolio. As a result I prefer applying repair or rescue strategies to most trades to turn them from a loss back to a profit. Often it is easier to repair the trade than take a loss. As well, repairing a trade usually means continuing to grow my portfolio while I earn income through the repair strategy being applied. If I take a loss I must spend time, risking more capital to recover the loss in a second, third or more trades before my portfolio can start to grow again. Therefore understanding how to repair a trade while risking small amounts of capital, while continuing to earn a profit, I believe should be the primary focus of every investor.

This repair strategy article is 3100 words in length and requires 8 pages if printed. and is for FullyInformed Members.

Repairing Losing Ultra Short SDOW Trade To Profits In The Trump Rally





 

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