Weekly Lesson Wednesday📝 

Gettin in n’ getting the fuck out

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Entries and Exits

One of the best skills to have in life is the ability to effectively “get in and get out”, whether you are robbing a bank, going back to a soft 4’s dorm to get puffed off, popping in the pub for a “couple drinks”, or most importantly a stock. You must smoothly enter and exit.

Trust me, it’s not as easy as it seems.

Before you buy a stock, you must have your entry and exit planned.

You wouldn’t rob a bank without a getaway plan, right?

Just like crime or cheating on your misses, you must be locked the fuck in and execute a predetermined plan if you want to succeed.

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How to Enter

The best way to enter a stock is to get issued a block of pre-IPO stock for zero dollar book cost… kidding, but wouldn’t that be nice!

There is no right way but here is how I enter my positions.

Traunching.

The act of traunching into a stock simply means to not ape in all at once but rather use every bit of patience your autist ass has and slowly accumulate a position in broken up bits and pieces.

Say you have 10k put aside to buy this stock. The truth is most yall would just fuckin hit one big market order and it shows..

Here is what you should do, break that 10k into quarters, so into $2500 increments.

Now when your said stock hits your buy price, place your first order with ¼ of that $10,000 ($2500). Now your foot is in the door.

Now, I wait till the stock further drops. Most of you guys shit your pants and unfollow us when your stock drops because you put your month’s rent into it all at once.

But if you only put a portion of your desired allocation in, you should be stoked to buy it again at a lower price.

We call this “Averaging Down” or “DCA (dollar cost averaging)

If you liked it at your buy price, you should love it when it’s even cheaper! 

You can now bring your average buy price down!

Now you wait patiently, for it to go down more, then, buy again, and if it goes down more? Good thing you have money still! Buy again!

I usually space my buys out in -10% increments. So every time it drops 10% or more, I buy again. Till my desired allocation is exhausted.

This strategy will end up giving you a cheaper buy price and allow you to purchase more shares…. In a perfect world.

However, sometimes the stock doesn’t get cheaper after you make your first buy. If the stock run’s up 10% and it looks like it has no signs of returning due to a catalyst, then I chad ram the other 75% or the rest of my desired allocation in. Can’t let that bastard get away.

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Now to Exit

You got in, congrats now get out.

Like in my previous newsletter (read here). You should know your exit price, you should have a plan in place, and don’t let the emotions kick in.

But smashing all your stock out at once isn’t always wise. Thought it is fun.

A little rule I use, when I am up 100% on a stock, I like to sell the amount of $ I originally invested (which would be half of the shares).

Sell my cost. De-risk. Yunno.

This way all risk is off and there is zero possibility I can risk a loss, only profit.

Now I let those additional shares ride to new highs or lows.

This helps you secure profits, mitigate risk, and increase hammer size.

However, you don’t have to do this, there are a ton of other wise ways and this only works if you are anticipating or planning for a 2x or more in the stock.

Maybe you are only hoping for 20%, then this strategy is about as useless as Anne Frank’s drum set.

Regardless of the % you are up, selling bits and pieces along the way is always smart to take risks off the table and help secure profits.

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Conclusion

Well lads, in a perfect world, this is how I would go about entering and exiting. It is not a one-size-fits-all, but regardless you need some entry and exit plan.

Not Financial advice, I eat crayons. Disclaimer here