Adrian Reid explains why trading halts drive him crazy: your money gets locked up for months or even over a year with no way to move it. He recommends keeping each position small, maybe 10 to 30 percent of your account, so a frozen stock won't kill your ability to trade everything else.
Over 12 months.
10%, 20%, or 30% of capital (examples).
Adrian Reid; "Enlightened Stock Trading."
You want to know one thing about.
The stock market that really drives me bonkers?
Stocks that go on trading halt forever.
I've got this stock in my portfolio that has been on trading halt now.
For over 12 months now. This sort of thing doesn't happen all the time, but it does happen. And the trouble is, when it does happen, if you're holding that stock, there's.
Absolutely nothing you can do but wait.
So what's the solution? If you're holding a stock that goes onto trading halt, there's really nothing you can do until the exchange decides to let it come off trading halt.
Now, that might be one day, two.
Days, five days, or a year or more. So the only thing that you can really do is make sure that every single position that you hold in your portfolio is very small, a small proportion.
Of your total assets, your total capital.
Because when your position size is small.
This sort of thing doesn't have to bother you.
Now, this stock is a annoying, yeah, it's driving me crazy, but it's still.
Only a very small proportion of my total trading account. So it doesn't really matter from a financial point of view, it's just annoying.
And I want to make sure that you're aware that this can actually happen.
Because if you're stuck with a position that goes on trading hold for a.
Long period of time, that capital is tied up. And if you've got a 10 or 20 or 30% position size, or 20 or 30% of your capital is in that trade, then you're going to be.
Completely hamstrung in your trading account.
And if it never comes off trading.
Halt, you're absolutely screwed.
So when you're sizing your positions, make sure your exposure on each position is a small percentage of your account. Because trading halts can happen.
And you as the trader cannot control the duration, the length of those trading halts. That's something that's up to the exchange and the company. And if it doesn't come off trading halt for several weeks or several months, you don't want too much capital tied up in that position.
So my name is Adrian Reed. This is Enlightened Stock Trading and Trading Holds is one more reason to make.
Sure that you keep your position size small. Because if a trading hold happens to you, you don't want it to limit your ability to continue to trade effectively and manage your account.
Keep your position size small until the next video.
I'm Adrian Reid. This is Enlightened Stock Trading. Bye for now.
