Anonymous
I don't earn great amounts each month so I would say I have very limited funding to cover my losses.
5
Discussion (5)
Learn how to style your text
Reply
Save
The Growth Hunter
16 Apr 2020
Home-based Trader at https://t.me/the_growth_hunter
Hi there,
the paper loss should be covered by your capital outlay when you first purchased the stock. Hence, you need not fork out additional from your salary to cover your losses.
However(as the question is a bit vague), in the event that you are on a margin/CFD account, it may force you to liquidate your holdings or top up to pay the losses because of the leverage that was used. (I hope you are not in this scenario)
Nonetheless, like our friend Lok Yang Teng said, if there are no changes in the conditions that fulfilled your criteria to buy your stock(s), then you shouldn't be sellinh.
From this, lessons that you can take away are:
1) Start Investing Small and With An Amount You Are Comfortable With
Invest only the amount that is comfortable for you after putting aside a certain amount for your livelihood. To be honest, not everyone is safe in the market. In fact, most ppl who started off made lots of mistakes and paid in the market before they became profitable(Provided they keep learning and stay in the market). So, invest with a small amount, learn from all the mistakes and good lessons. Only when you see consistent results you can start to fund more and scale in.
2) Think Risk First
Before you purchase stocks, always think risk first. Think about where will u exit and take the loss in the event that the stock doesn't go in your intended direction. Because cheap and get cheaper, low can get lower.
3) Have Proper Risk Management
Do not only think about the potential gains that you will get when you are buying a stock. Because once you buy a stock, you can't control how much you will earn from it. What you can control is how much you are willing to lose in the event it turns south.
Wishing you a safe investment journey ahead:)
Reply
Save
Clara Ng
16 Apr 2020
Community Manager at Seedly
Hi Anon,
Your paper losses will become real losses when you sell them. Know that you’re not alone a...
Read 3 other comments with a Seedly account
You will also enjoy exclusive benefits and get access to members only features.
Sign up or login with an email here
Write your thoughts
Related Articles
Related Posts
Related Posts
Why would you need to cover your paper losses unless you are trading with margin or using money that shouldnt be even used for investing in the first place!
You should build on emotional capital and learn how to deal with paper losses instead