w/e 1-4post mortem, page-38

Re Stop Losses

Great intro to stop losses from 5hareholder earlier.

Next step is to monitor your stop loss price (conditional sell order) up as the price rises.

This is a way of locking in most of profits made but still exposing yourself to further upside.

Eg If you buy a $1 stock and set a 95c stop loss and the stock moves to $1.10 you can move your stop to $1.05 locking in 5% profit but still exposing yourself to more gains should the price continue to rise.

While it's tempting to lock in quick gains and you never go broke taking a profit but sometimes there's more in it.

I learnt this with AVBOB which I bought at 1.2c and very happily sold at 3.7c only to see it run to 15c within a couple of days!

If I had my time again I would have taken my capital out and let the balance run with a rising stop loss.(still very happy with that trade though!)