Why it’s important to use stop-losses and take profits
My biggest mistake is not updating my stops as the stock moves up and being greedy by not taking my profits. Even when the low breaks the trend line I won’t sell. I further magnify my loss by continuing to refuse to sell even when the present low exceeds the previous low by a significant amount. When it goes below the previous low, it very seldom recovers. But, I continue to hold on for a much bigger loss. As a result, I now try to focus on very high volume trades that are down a minimum of 15-20% (downgrades/warnings), have already bottomed out and are being PUSHED up by the ETREME volume. But even then I lost $600.00 in profit on RIMM the day before they announced. What do they say about repeating the same mistake and expecting a different outcome….STUPID & COSTLY.