In work we trust :)

This is the point where you admit you were wrong. No one can pick winning stocks 100% of the time. Accept this fact. You can only play the odds. Let’s say we buy a stock at $20 with the plan that it will go up to $24. Now we have to decide what to do if the stock does not go up, but suddenly starts to fall.

 Let’s decide that if the stock moves below $19, we will accept that we were wrong about the direction of the stock, sell the position immediately, and take a small loss. By taking small losses, we preserve our trading capital, which allows us to trade again tomorrow. Before we even get into a position, we have to measure our risk-reward ratio.

 In the above example, if we were correct about our stock pick, we would have made 4 points. If we were wrong in our stock pick, we would take a loss of 1 point. That is a risk-reward of 4:1. Let’s say we were only correct about our stock picks 50% of the time and we make four trades. Two were winners (2 x 4 points) equaling 8 points. Two trades were losers (2 x 1) totaling 2 points. We now have a gain of 6 points by only selecting winning stocks 50% of the time.

Assuming we were the worst stock pickers in the world and were only correct 25% of the time, we would still have a gain of 1 point.

Read article source: STOP LOSS by Ryan Cooper of StockTeacher.com

JOHANNESBURG (Reuters) - Thousands of South African workers are expected to down tools in a national strike on Wednesday, bringing Africa’s biggest economy to a standstill in a protest against rising electricity, food and fuel prices.

The nearly 2 million-strong Congress of South African Trade Unions (COSATU), an ally of the ruling ANC party, says the one-day walkout will be a warning to employers who may want to sack workers because of a downturn in profits due to a power supply crisis.

In the mines sector, workers are particularly fearful of job cuts after a five-day power cut in January and the rationing of electricity to mines slashed output and earnings in this top precious metals producer.

“We are adamant that workers should not be asked to pay for government’s failure to invest in electricity,” Cosatu’s spokesman Patrick Craven said.

Mines, refineries, car makers, textile factories, businesses and construction of stadiums meant for the 2010 Soccer World Cup could halt for a day, while workers and students are likely to stay at home if public transport is disrupted.

Full article: One-day strike could bring South Africa to a halt