Stops: You could debate this one for ages, but after 18 successive stop outs in a row I came to the conclusion that stops are a good way to sell good shares to someone else at less than I paid for them.
Hard call though because I have also done the ride to oblivion.
Not an easy topic and not one I can even pretend to know the answer to. Except to note that most of the big players don't use stops. Imagine what would happen if XYZ company fell 10% for some reason and everyone apart from perhaps management had stops.
So at the moment I tend to think of stops as being tools for weak hands. If you can be forced to fold after a little pressure perhaps you have too much in the pot or shouldn't even be sitting at the table in the first place.
Other people will make money from your weakness.
Position sizing perhaps?
A clear set of objectives and expectations? If the company misses expectations then that is your stop?
THE TREND IS YOUR FRIEND - "Until the bend at the end....."
Never trade on leverage or margin Yep couldn't be truer - and avoid CFD's Forex and Indices which are inherently leveraged and on margin.
In every trade there is a smart person and a dumb one, which one are you?
This one is great. Or to put it another way to make a successful trade two other people have to make a mistake. One to sell to you too cheaply and another to pay you too much.
Which means you have to make less mistakes than 2/3 of the people in the market.
Thinking about it - to assume you are better than 2/3 of the market is a pretty arrogant thing to do.
NEVER believe management Or forum cheer squads.
The golden rule “He who has all the gold makes all the rules”. .
That one is a beauty as well. Particularly when you think that as a shareholder you don't even buy shares from the company - so they get nothing from you except you are part of the system that provides capital when they need it - every year or so - the rest of the time you are an annoyance.
There are none so blind as those who do not wish to see forum cheer squads again...
