Q: If you have been stopped out once or twice on a stock at a loss, do you jump back in with a reverse position?
A: The best traders are flexible and persistent. They are willing to take several “stabs” at a market before giving up. They are also equally willing to go either long or short. However, just because you are stopped out twice on a long, doesn’t mean the market is headed lower and you should go short. Unless you have a definite signal that the trend has reversed, then you should avoid reversing a position simply because you got stopped out.
Dave Landry