Fast Money “Trading School” - Dollar Cost Average
June 24, 2008 11:02 AM
Here is some “great” advice from a Fast Money “Trading School” spot on CNBC - Dollar Cost Average. Just simply buy more when it plunges and you will eventually come out ahead. Sounds simple. One problem, it is HORRIBLE advice. You do not buy more when you are WRONG. When you are wrong, you exit and wait, period. This is the type of advice from the Talking Heads that makes me cringe. This philosophy is good for only one set of people, people that have zero clue as to what they are doing. This begs the question, if you have no idea what you are doing, then why are you trading to begin with? if you do not know what you are doing buy mutual funds, do NOT trade. The professionals WILL take your money.
Do you see why I do this site. To help people avoid horrible advice like this. If you are wrong, then you are wrong. Throwing more money blindly at a mistake has to be the dumbest advice in investment history. If you are going to follow this nonsense, please just put all of your money in a bag and email me for my address. Then, send it Fedex. Morning delivery would be nice. Why give your money to some rich kid on Wall Street when you can just as easily give it to me?. I am still startled that this is “trading school”. It is ANTI trading school. There is not one trader alive with more than 12 cents that would give that advice. Unbelievable.
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GM and F bring to mind two great examples of this nonsensical advice. If you kept buying more, and more, and more, and more of GM….you will eventually have your entire life savings in a stock that may become totally worthless. This is HORRIBLE advice .