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Profe$$or

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Profe$$or

Re: None

Friday, 12/02/2005 11:20:09 PM

Friday, December 02, 2005 11:20:09 PM

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Congratulations on the new board Susie! Use what you've learned to help others.

I'm fascinated by charts and charting myself but I'm a science and medicine guy so kind of understandable.

I think however the single most important thing for an investor is cutting your losses short. Always protect your investment account. Be it only $500.00 or $50,000...protect it. Cutting losses short is essential.

Most people have a hard time selling a stock for a loss because they hate to admit that they were wrong. Some would rather wait and hope for the price to come back. Or sometimes you do try to cut your losses short only to see the stock turn around on you and go right back up in price. Then you begin to doubt yourself and think you were wrong for selling and that the loss cutting policy is a bad one.

How much should you cut your losses short? It is different for everyone. Many texts recommend 10%. Many newer ones and quite a few daytraders or active traders like to keep it closer to 3% or 4%. I prefer 7% to 8% below the purchase price. By doing this you protect yourself against a substantial loss.

Remember if you let a stock go down 50% on you from where you bought it, then you have to make 100% on the next stock to break even.

Best of luck to all

Enroll in Wealth University today!
#board-10933



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