Portfolios filled with stocks must be experienced by every stock trader. The term stuck stock is often used in stock trading to refer to the shares that the trader bought but then the share price decreased, so that if the trader sold the stock (cut loss), the trader would suffer a loss. Even the loss may be quite large in nominal terms.
Why do traders get stuck? There are only 2 (two) reasons: Traders don't want to cut loss or traders forget to set a cut loss target. But the main cause that I often encounter is that traders don't want to cut losses when the stock drops.
What causes traders to not want to cut losses is because traders continue to hope that the stock price will rise again when the price has fallen. Actually, you have to apply the principle of cut loss in trading so that your shares don't get stuck.
Especially if you buy third-tier shares or stocks that are less liquid, you should always be ready to cut loss as early as possible if the stock price does not move according to your expectations. Well, but what if your stock has been stuck and doesn't go back and forth? Or at least can break event point?
In this post I will explain some strategies to get out of stuck stocks. Honestly, actually not much strategy that can be done. If it's stuck, yes, most traders can only hope that the stock price will rise again. However, I will try to describe a trading strategy that I have also done myself.
Case study
For example, you are stuck in a stock, where the stock has not gone up for months and you finally give up... You want to get out of the stuck stock. What to do? Pay attention to the strategy below.
Scenario 1
If you are stuck with a small lot, you can sell all the shares, aka cut loss. For example, you are stuck in 10 lots of PTRO shares at a price of 1,000 and the price is now 900. You can cut loss. This may not be a problem because the total estimated loss is still small.
But what if it's up to 300 lots?? It is undeniable, most traders who are already involved in large amounts usually do not dare to sell their shares, because if all the shares are sold, the total estimated loss will be very large.
Usually this will affect a person's psychology, it may even interfere with daily activities. So, how do you get out of a stuck stock?
The trick is: Sell the shares little by little aka cut loss is done gradually. For example, you want to cut loss at PTRO as much as 300 lots, then you can plan a cut loss of 5-10 lots in a few days, up to 300 lots. It may take several months for all of your stuck stocks to sell out.
Why is it taking so long?
Yes.. it takes a long time.. But that's the way to get out of a stuck stock without affecting your psychology too much. There is another scenario next.
Scenario 2
The method is almost the same as in scenario 1, but here you also compare the profits on other stocks that you get. For example, you are stuck in PTRO as much as 300 lots, but in the course of trading, you can profit 10 million from TLKM. Here you can use the 10 million profit to sell your stuck PTRO shares, so that your trading results break even, aka break event point.
So, your trading results will continue to break event points until you get rid of your stuck stock. At least you don't lose big. With scenario 2, you probably don't have to wait too long to cut loss little by little with too small a lot number.
Scenario 3
Still don't dare to cut loss at all? If you still don't dare to cut loss, like it or not, like it or not, you have to be willing to wait for your stock price to rise again... There's no other way...
From this stuck stock, there is one thing you must learn: Would you like to do it again?
If you've experienced your stock stuck, then you have to learn from mistakes. Don't let your stock get stuck again in the same way. Then, how do we avoid getting our shares stuck? Read the answer here: How to Avoid Stocks That Stuck.
