Trade Mental Hurdle

[yask72]

Hey everyone,

I am in this mental hurdle that i find myself in sometimes and i'd like your feedback on how to overcome it and or maybe how you've dealt with some of your hurdles. Mine is a simple one, i find myself waiting to purchase a stock because i keep thinking to myself i may get it lower, but then i lose my opportunity because i've waited too long. It doesn't happen often, but it does and its happening right now. Here is my scenario:

I have been wanting to get into GoldCorp (G) for a while now and have done all my research and so forth and i am comfortable in owning it. It's not the actual purchase of the stock that is scaring me. Now that its dropped below my price point (which was 45) i want to get in. But now i find myself saying...well...maybe i should wait till it goes to 43 or 42? I know gold stocks aren't for the faint of heart, but is there any tricks to remove that mindset? I did the same thing on BMO a while back and got burned by that reboud as well. I should stick to my price points, but when the stock drops below my price points, i find myself waiting and losing my opportunity.

This doesn't happen often...but now that i think of it, for some reason i only have this issue with BMO and G in particular.

Thoughts?

[Zeeshan Hamid]

You can put a buy limit order. If you're worried about missing out if the stock takes off, you could put a buy-stop-limit order. Tweak it as price continues to drop. That way you wont "miss out" while you wait for the price to drop.

[Causalien]

It depends on if greed or fear is holding you back. Get on tune with what you were feeling and get back to us

[doctrine]

Do you have a target price?

For example, when I buy a stock, I have an expectation of gains. For example, if I buy Telus now at $57, I would expect to get 5% a year on the stock price plus 4.3% on the dividend. Thus, in 5 years I would expect the stock to be around $73.

Should I buy Telus at $57? Or should I hold out for $55? Does it really matter if I expect it to be (conservatively estimated) $73 in 5 years?

[Toronto.gal]

This doesn't happen often..

In that case, you don't really have a problem.

Every investor has experienced fear, greed & indecision, so you're not alone.

Have a solid plan and stick to your goals for the most part.

If things don't go your way, there are steps you can take.

[MoneyGal]

In case it is helpful, one of the "tricks" I use in similar situations is to tell myself, "I already made that decision." That is, you had already decided your buy-in price was $45 -- now you want to revisit that decision. So one quick way around that is to relate to the decision as a done deal, not something you are going to revisit in the moment. Right?

[kcowan]

Naturally you want to avoid catching a falling knife. So you can watch the volumes and the bid/ask spread and try to catch it at the bottom. You have already concluded that $45 is a good deal, so getting it for anything less is a bargain!

Once you buy it, stop looking for a while!

[londoncalling]

If things don't go your way, there are steps you can take.

Care to expand on the steps that can be taken Tgal? I am not having the mental hurdle mentioned above. Not to stray too far from the OP but am dealing with a scenario that is the opposite. I am unable to stray from my target even a few pennies and it has cost me some nice run ups over the past few weeks. I do have considerable patience and realize that there will be other opportunities however, I would like to take advantage of my efforts so by offering the original poster on some options on what can be done when things don't go your way it could be useful to many of us lesser experienced members. I would agree with the idea to use limit orders. I have never put in a market order and know there are situations when it can make sense as mentioned on a different thread.

Cheers!

[Jungle]

I pick an entry point I would like to buy and then leave enough money to buy more if it drops. Also with gold miners they really go up and down. We've seen this over the last few weeks as people are exiting gold and bonds for more risker assets.

[GOB]

Selling puts seems like an ideal solution for someone in your situation. You could have sold a put for G at a $45.00 strike, and received some cash in return. When G hit $45 you would be obligated to purchase at that price, but your actual cost basis would be lower because of the premium you received when you sold the put. If G never went down to $45 by the time the option expired, you get to keep the premium. It takes a lot of the emotion out of trading because you make the decision ahead of time and are kind of forced to stick by it. In return though, those premiums can add up quite nicely.