## Relatively risky! Why do investors fall into the 'stuck' situation?

Falling into the "stuck" situation can happen to many people, especially those who are new to investing. This term refers to a scenario where investors buy assets (stocks, crypto, funds, etc.) with the hope that prices will rise, but the opposite occurs—the prices plummet rapidly. Instead of cutting losses, investors choose to wait for the prices to return to previous levels.

## What exactly is 'stuck'?

**Stuck** is a situation where the value of held assets decreases from the purchase price, and instead of releasing, investors hold on, thinking "it will go up someday." The consequence is that the cost per unit keeps increasing as the price drops, and if the situation continues, it could lead to huge losses.

## Why do people get stuck? Three main reasons

### **1. Buying driven by FOMO and market atmosphere**

This situation often occurs with investors who rely on emotions. For example, ABC stock normally trades at 5 baht, with a daily volume of no more than 1,000 shares. But in the past 2-3 weeks, the price surged to 10 baht with a massive increase in trading volume.

This atmosphere makes many investors afraid of missing out on profits, so they rush to buy at the peak of 10 baht without studying the fundamentals. After heavy trading, the price collapses to 3 baht. Those who bought at 10 baht are now at a loss of 7 baht per share, and many choose to "hold" and wait.

### **2. Market pump and dump through unclear rumors**

Price manipulation via rumors is a classic tactic of major shareholders aiming to create a rush to buy or sell. They might spread news about attracting big investors or new growth targets for the company.

In the digital age, information spreads quickly, leading investors to buy en masse, causing rapid price increases. When the original holders sell out, the rumors disappear, trading volume shrinks, and the price crashes. Trend followers who jump on the bandwagon often end up stuck.

( **3. Doing thorough research but buying at the wrong time**

Some investors study stocks meticulously, such as MOE, which has strong fundamentals, good growth, and a reasonable P/E ratio. But the problem is they buy "late," after the price has already risen almost entirely.

When the company's management announces slowing growth or worse, normal conditions, the stock price drops. Investors with the mindset of "not selling = not losing" refuse to sell, resulting in being stuck for a period.

## How to avoid getting stuck: 4 key strategies

) **1. Set clear Stop Loss from the start**

Stop Loss should be set definitively before investing. The calculation formula is: **###percentage of acceptable loss### × (purchase price)**

Example: Buy UAA at 20 baht and willing to accept a 5% loss, so Stop Loss = 5% × 20 = 1 baht. This means if the price drops to 19 baht, sell immediately without second thoughts.

Stop Loss points vary for everyone but depend on your risk tolerance.

( **2. Set profit-taking targets**

Speculative investors or day traders should follow the principle "buy fast, sell fast," especially with high-volume stocks.

Example: Buy DEF at 5 baht, 5,000 shares, with a capital of 25,000 baht. Set a target to sell at 5.2 baht. Once the price hits, take a profit of 1,000 baht. This method is called scalping or quick profit-taking.

) **3. Study fundamentals seriously before investing**

The saying "invest in what you understand" is not just a catchy phrase. You should check operational performance, profit-generating ability, and whether the offered price is reasonable. Following trends blindly is risky and can lead to emotional losses.

### **4. Use the "averaging down" technique to reduce costs and get out of the stuck situation**

This technique is suitable for those heavily stuck. The principle is to buy more when the price drops to lower the average cost.

Example: Buy shares at 1 baht, 1,000 shares, with an investment of 1,000 baht. When the price drops to 0.5 baht, incurring a 500 baht loss, and if you believe the stock is good, buy an additional 2,000 shares with 1,000 baht. Now, you hold 3,000 shares with a total investment of 2,000 baht, and the average cost drops to 0.67 baht/share. When the price rises back to 0.67 baht, you can exit the stuck position.

**Important:** This technique only works if you have thoroughly studied and confirmed that the company or asset has solid fundamentals.

## Summary: Falling into the 'doy' is easier than being 'stuck'

If you're worried about getting stuck and hesitant to enter the market, try changing your perspective. "Falling into the doy" ###losing short-term and ending### is easier and more preventable than being "stuck" (losing for a long time and being trapped), which requires a long process and multiple factors.

The key is: study, set strict Stop Loss, and stay disciplined in decision-making. With this approach, you can not only avoid getting stuck but also successfully exit at the right time.