How I plan to exit StarHill (losing investment)?
My first potential realised investment lost
As my investment kept showing deeper reds, It’s about time I have a more concrete exit strategy (should have one before entering) for my investment. I’ve placed a stop lost at $0.690 (Buffer).
How did I get that number?
Being a technical trader, it is my duty to identify trends and know what makes them. In a bearish trend, a series of lower lows and lower highs have to be formed by candlestick. If the low of $0.70 is broke, the REIT would have a higher probability to trend lower (Technical perspective).
Why not get out now?
The Reit still maintains a strong fundamental (Cashflow, Current ratio) for me to stay, plus its paying me to wait.
But if the fundamental is good why not hold on without a stop loss?
Yea, I have the same initial thought but then I thought again, and again on what is my opportunity cost for holding on. Then I realised that there are many other listed companies that have better prospects and I can still come back to this Reit if I could get in at a better price (Reversal)
How did I create this exit strategy?
You have to know what your entry strategy is before creating an exit strategy.
Because an entry strategy is the understanding of why and how you should enter and an exit strategy is the understanding of the invalidation of it (Entry strategy). // Easier to understand; an exit strategy (stop loss) is where price invalidates your investment methodology (A price where you shouldn’t be buying).
P.s Would love to know how others exit their losing/winning investments, so share do share with me