Read Part I: Where does my stock cut loss tolerance limit? - Part I. In Part I I have explained the essence of graph science. So, if you want to trade, you must first understand the science of charts.
In essence, stock prices will go up and down (and so will keep repeating). So, do traders need to cut losses? It's not better to just wait. After all, the stock price in the end went up by itself, right?
You can tolerate not doing a cut loss if the 'stuck' stock you hold has the following conditions. First, you have liquid stocks. By liquid I mean tier 1 stocks (blue chip stocks) or at least tier 2 stocks. Also read: Understanding Tier One, Tier Two and Three Stocks.
Stocks are liquid, the volume tends to be stable, the bid-offer queue is busy every day, so you can tolerate waiting for stock prices to rise. Because from my experience, even though these stocks are 'only' tier 2 stocks, but if the stock is still LOTS of enthusiasts (as can be seen from the volume and bid-offers during trading hours), then when the stock price drops a lot, sooner or later the stock has to go up again. .. The point here is: Patiently waiting. Be patient that the stock price will one day rise again.
Second, you own stocks whose companies are clear. If you are concerned with the shares of Indofood, Unilever, Perusahaan Gas Negara, Pakuwon, Bank BRI, the stock price will usually tend to rise again when the price drops a lot. The point remains the same, you just need to be patient.
But if you have shares in companies that are starting to have problems, such as Cipaganti (CPGT), Sekawan Intipratama (SIAP). Or, companies whose products are no longer popular to go public (eg tourism, travel, expedition companies), why would you buy their shares? There are cases where traders are stuck in CPGT for years and the stock price is still sleeping until now. Too bad, right?
Look at the stock transactions on the Stock Exchange. Stocks that are liquid and often traded by traders are stocks whose products are general, such as food, instant noodles, banking, property, construction, mining.
So, to what extent should you start to dare to cut loss? You have to start cutting losses if the stocks you hold are stocks like the ones I mentioned above: Troubled and the companies are not popular at all. Stocks like this generally have no interest (bid-offers are a bit wasteful or there may even be no demand), and their stock prices fall easily, and it's very difficult to bounce back.
Meanwhile, you can tolerate not cutting losses, and be more patient waiting for stock prices to rise, if you have a good company technically, product, not affected by problems and supported by fundamental conditions.
