Soul Strut

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<blockquote> i just hate babysitting trades so i do my best not to rot with a loser for too long. even if i know i'm right in the long run. </blockquote> I'm with you on that. One of the best things to learn is how to cut your losses and move on. Waiting for a loser to turn around causes you to miss opportunities elsewhere with that money. That is the reason you have to set a "stop loss order" on every trade you make, as FGlory mentioned earlier. For some of the newer folks, a stop loss is a number you set that you want the stock sold at if it declines. For example, you buy shares of XYZ at 100. You then decide a percentage that you are willing to risk, say 8-10, maybe more if it swings a lot. I usually keep it at 10% regardless. So, you would set a stop loss order at 90. If you are right and you start to gain points, you want to protect your gains and move your stop loss up. That's called a "trailing stop loss". You make 5 points on XYZ so now it's trading at 105, move your stop loss up to 101. You've now locked in profit of 1 per share. (a quote from a professor..."I'm more concerned with the return OF my money that the return ON my money) Keep moving the stop loss up if it climbs more. But by all means, USE STOP LOSS ORDERS. No one is right on every trade, even the best professionals are wrong sometimes. I'm wrong a lot. BUT, I learned a long time ago to cut my losses quick and move on, and that's what seperates good traders from bad. Look at it this way...you can be wrong three times and only lose 8% each time, then correct once and hit for over 25% and that makes up for three mistakes. Be right 33% of the time and you'll do ok. You might see the stock hit your stop loss, then turn right back around and go back up. That's called getting "whipsawed" and it sucks, but it happens. Suck it up and either buy back in or move along to something else.

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