WE ALWAYS TAKE A PROFIT
It is truly amazing how fast stocks run up and then pull back. Even after 21 years of trading,
it seems odd. We are not complaining mind you, we like fast movers. We would love to bring
back the days of 1998, 1999, 2000! Those days were ridiculous compared to 2007.
So, the old saying goes ... "You never can go broke taking a profit."
Good words to live by and really needs to be burnt into your brain when you are in a trade!
Stocks as a rule...they drop much quicker than they rise. Another fact of stocks: It is easier
for a stock to lose value than to recover value. Here comes something that should be taught
in grade school and isn't taught in high school or college. Unless you have a MBA, you may not
know this. It is easy to forget stuff like this even if you once learned this in a classroom a long,
time ago! A stock that drops 10% must rise 11% to reach its original value. A stock that drops
30% must rise 43% to reach its original value. A stock that drops 70% must rise 233% to reach
its original value.
So, as you can clearly see by now, the trick is not to experience ANY large losses. EVER!
When you get into a trade, you need a stop loss point. What price will you sell, if the trade goes
the wrong direction? You can't trade without this crucial information.
This becomes totally vivid when you have 100,000 shares on the line. It is less critical with only
100 shares. Some people say 10% stop loss, 8% stop loss. That works trading 100 shares.
If you have $250,000 at risk, you need a stop loss that is a dollar amount and/or 1%.
We have a rule, never lose more than 1% in a six figure trade.
Sometimes you may think it can't happen, but then it always seems to play out that way.
Besides if you get stopped out of your trade, you can always re-enter that trade when it
is going your way. You can also short the stock and make money on the downward slide.
It is easier said than done but it is the key to making and keeping your fortune. Cut your
losses ultra short. Nip it in the bud. Admit you are wrong. It is very hard to do this.
Cut and run on your losses. Like a really awful date. Delete.
Let your winners run and by all means add to your positions! There are some stocks that we
love and are quality investments for the long term. WYNN, LVS, BIDU, GOOG, CROX, AAPL,
RIMM, FSLR, NILE, GRMN, NVDA, VMW.
The dozen stocks that rock our world. Hope you have a great weekend and happy trading.
JETWAKETRADERS@gmail.com
831-331-4265
Namaste'
it seems odd. We are not complaining mind you, we like fast movers. We would love to bring
back the days of 1998, 1999, 2000! Those days were ridiculous compared to 2007.
So, the old saying goes ... "You never can go broke taking a profit."
Good words to live by and really needs to be burnt into your brain when you are in a trade!
Stocks as a rule...they drop much quicker than they rise. Another fact of stocks: It is easier
for a stock to lose value than to recover value. Here comes something that should be taught
in grade school and isn't taught in high school or college. Unless you have a MBA, you may not
know this. It is easy to forget stuff like this even if you once learned this in a classroom a long,
time ago! A stock that drops 10% must rise 11% to reach its original value. A stock that drops
30% must rise 43% to reach its original value. A stock that drops 70% must rise 233% to reach
its original value.
So, as you can clearly see by now, the trick is not to experience ANY large losses. EVER!
When you get into a trade, you need a stop loss point. What price will you sell, if the trade goes
the wrong direction? You can't trade without this crucial information.
This becomes totally vivid when you have 100,000 shares on the line. It is less critical with only
100 shares. Some people say 10% stop loss, 8% stop loss. That works trading 100 shares.
If you have $250,000 at risk, you need a stop loss that is a dollar amount and/or 1%.
We have a rule, never lose more than 1% in a six figure trade.
Sometimes you may think it can't happen, but then it always seems to play out that way.
Besides if you get stopped out of your trade, you can always re-enter that trade when it
is going your way. You can also short the stock and make money on the downward slide.
It is easier said than done but it is the key to making and keeping your fortune. Cut your
losses ultra short. Nip it in the bud. Admit you are wrong. It is very hard to do this.
Cut and run on your losses. Like a really awful date. Delete.
Let your winners run and by all means add to your positions! There are some stocks that we
love and are quality investments for the long term. WYNN, LVS, BIDU, GOOG, CROX, AAPL,
RIMM, FSLR, NILE, GRMN, NVDA, VMW.
The dozen stocks that rock our world. Hope you have a great weekend and happy trading.
JETWAKETRADERS@gmail.com
831-331-4265
Namaste'
posted by JETWAKE at
12:16 PM
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