Yes I agree, but all depend on what you are doing really.
Cut your losses is a must for trading, but if you are positioning into something (our miners and juniors come to mind) and with crazy markets that we have, you have no other way but to slowly accumulate and not worry about stops as long as you know and follow the story and you are in agreement with management and their progress ...
On the another hand, I have many positions in my PF that I'm wiling to 'let the winners run' but until tide change, until sector start rising, my boats will probably just hang in there....
So it all depend what you are doing. You can find rule for everything and make a case of it. "Take profit fast, let profits run, cut loses, accumulate (averaging down), never average down..." etc
As I mentioned before, for now I'm only paper trading, I'm not confident into what I'm doing here.
But if I would put 10% of my PF in every trade I paper trade last month (taking 10%) I would be way better than I really am. And looking at charts it looks like I'm leaving so much on the table. And I do! Some picks were up way more than 10%, why cutting profit short? True, but <if> you manage to keep milk the market with 10% here and 10% there it can add up also over time.
If, though, there is one big if :-)
After first 100 trades I may feel better but for now this is just a play, game, nothing serious...
stockcharts.com |
