Gary, I firmly believe in (at least for the past 12 months or so!) that once a profit is in hand, I HAVE to follow it up with a trailing stop. It has saved me from profits turning into losses a number of times. How to set the trailing stop level is a good question — no doubt I have turned some what would have been better profits into smaller ones because the level was dinged, but it was still a profit.
Gary December 8, 2022
The problem with many of these things are the gap ups and gap downs. One day to the next. Stops are good if you’ve already got a trend and you’ve got enough liquidity that the stock is not heavily manip’d. This spike in the Pot MSOs just came out of nowhere and then went right back to where it came from. I was greedy not to take a stupid profit when it cropped up in a couple days.
Traders should use trailing stops (auto or mental) if there is a trend and they trust an equity’s liquidity not to get taken out on a swoosh and left behind on a reversal. But profit is profit, eh?
That is why I can only be a portfolio cobbler, not a trader. I generally care about the positions I have for portfolio balance reasons. Since the MSOs were not an ‘investment’ but instead, a seasonal play I should not have been greedy when the profit came so easily.
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Gary, I firmly believe in (at least for the past 12 months or so!) that once a profit is in hand, I HAVE to follow it up with a trailing stop. It has saved me from profits turning into losses a number of times. How to set the trailing stop level is a good question — no doubt I have turned some what would have been better profits into smaller ones because the level was dinged, but it was still a profit.
The problem with many of these things are the gap ups and gap downs. One day to the next. Stops are good if you’ve already got a trend and you’ve got enough liquidity that the stock is not heavily manip’d. This spike in the Pot MSOs just came out of nowhere and then went right back to where it came from. I was greedy not to take a stupid profit when it cropped up in a couple days.
Traders should use trailing stops (auto or mental) if there is a trend and they trust an equity’s liquidity not to get taken out on a swoosh and left behind on a reversal. But profit is profit, eh?
That is why I can only be a portfolio cobbler, not a trader. I generally care about the positions I have for portfolio balance reasons. Since the MSOs were not an ‘investment’ but instead, a seasonal play I should not have been greedy when the profit came so easily.