Stock Trading Quick Tip: The Math that Slaughters Traders

Free Guide - The 5 Tools I Use To Find Stocks To Trade: http://claytrader.com/lp/Free-Guide-Trading-Tools/?utm_source=social&utm_medium=youtube&utm_campaign=resource%20guide This is a concept that all traders must understand. The trickiest part about all of it is the seemingly "obvious" nature of the numbers. But when you stop and take a closer look, you will see that for those people trading the markets, it can turn a bad situation into a total disaster. The Stock Trading Reality Podcast - http://claytrader.com/podcast/ Join My Private Trading Team - http://claytrader.com/innercircle/ Learn to Use Charts - http://claytrader.com/training/ ClayTrader.com and its employees are not a Registered Investment Advisor, Broker Dealer or a member of any association for other research providers in any jurisdiction whatsoever and we are not qualified to give financial advice. Investing/trading in securities is highly speculative and carries an extremely high degree of risk.

Comments

1. 10% loss needs a 11.1% to recover. 20% needs 25%. 30% needs 42.9%. 40% - 66.7%. 50% - 100%. 60% - 150%. 75% - 300%! Chapter 1 in technical analysis for dummies.
2. this is a great point ...that a lot of new traders don't know... and not many people talk about from my experience.... great job man
3. This is number 746 on my "Scary" list of basic chit that people who trade don't understand and who are playing the same market I am.
4. wow, i have 2 years trading an never even realized this...lol thanks for the wake up!
5. Brilliantly clear way of explaining things in your videos.
6. keep it 100% goys. thanks for the great FREE INFO. GOD BLESS
7. Can you do another option trade video from start to finish with no pausing and state the strike price you want when the stock is trading at another
8. thanks clay trader. Great vid as per usual. Great point to emphasize as it is something most beginners would over look.
9. This is called Siegel paradox. x% in a way needs 1/(1+x%) in the other way.
10. So simple yet so difficult lol thanks for clearing the air for us
11. Hay clay, if the price goes up by 50% (to $15) and the next day it goes up another 50%, does it go up by $5 or $7.50.
12. this was the most pointless video, anyone with half a brain could figure this out. People are just too dumb in math, but then again I have a math minor.
13. never thought about this way thanks.
14. if you average down in this situation by doubling your position at 5, you would only need to get to 7.50 to break even because you would have an average price of 7.50 after the average down. Not ideal to be in a place were you need a 50% increase in a stock to get to break even but it isn't quite as bad as it seems if you are able to average down your position. Not advocating that anyone holds a position with a stop loss at 50% of the price or no stop at all, but the light at the end gets slightly closer w average down policy. Best of all, set stop at 10-15% and you wont have to worry about being 50% in the hole
15. if you can't do basic math, close your trading account now
16. Are there really people trading stocks that don't know this math? Oh my gosh
17. Well honestly you need to calculate this in PIPS or POINTS not Percentage.
    This is a trick question. Thats why a DISLIKE for this video.
    
    I really like the way you trade though ;)
    
    Keep it up and wish you all the best !!!
18. Ok I havent fully had time to solve this - but I can now articulate the issue better.-You are implying that losing 50% and gainnig 50% is roughly equivenlent in terms of odds, that if had a coin and was going to flip for it it would a fair bet. -This is a disastorous bet. In the stock market if the odds of gaining or losing 1 percent was 50/50 each day, no matter your account size you would lose up to 95% of your money in under a year, virtually guaranteed.
19. You are giving an incomplete problem statement that is source of confusion.  It matters if you sell you shares @ 5.IF you don't sell you shares it does not matter where the price "has" gone only the price you sell and the number of shares!IF you do sell at a lower price you lose the ability to buy enough shares so that the return trip will break you even.