Stock Trading

Why It’s Important to Set (And Take) Stops

In the market you’re going to be wrong — a lot.

And if you can’t set (and take) stop-losses you are going to get CRUSHED.

C.R.U.S.H.E.D.

I used to be the guy who never took stops.

It’ll come back.  I have faith in my pick.  This is a long term trade.

That’s what I used to tell myself.

Well, faith’s got nothing to do with it.  And after you’ve refused to close out at a stop-loss level and watched your position plummet 50, 60, 90% you learn, it doesn’t always come back!

Take this weeks pick $MEMS.

Wow.

1 week.  -50%.

But, there was plenty of time to close out for the standard -10% stop.  And you would have thanked your lucky stars you did that.

Here’s the chart:

KeerrrrrrrSPLAT!

Stops.

Take them.

Every time.

Any questions?

Good luck out there!

2 Comments

  1. raymond fleming May 12, 2012
  2. David John Hall May 12, 2012

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