What up Profit.ly bros!
Now what I wanna talk about today is how important the good ole saying "Cut Losses Short and Let Your Winners Ride" really is. Well yesterday $RIGL made huge gains from about 3.24 all the way to a high of 4.07 and held its gains very well considering it gapped up from the mid $2 range. So when the stock close near the HOD one can only expect the infamous "Gap Up". Well the stock stagnated AH and premarket the stock dropped to a low of 3.7 I had the ability to get out in the 3.8s for a minimal loss but I was hoping it would reverse. I was wrong. The open was met with a wall of sellers, and i kept moving my stop loss down waiting for a move upwards, finally triggered my stop at 3.7 which cost me $1000 which sounds huge but isn't bad for a $50k account. So when we say cut them short when the trend reverses, we mean it. Seeing the stock to be way over extended and bag holders jumping ship i went into a heavy Short position. Judged the opening price as my risk level and held the trade to my biggest short sell win to date. That's why i love trading the price action, If she's crashing ride that bitch down lmao. I executed the short at 3.66 and covered at 3.39 Making $1600 and evening the P/L for the day to $680. I maintained my discipline throughout the day to nail SPU through 2 halts and sold at 11.05 from 9.65 adding $1400 since i play large positions. When you don't cut losses especially with a large account you get hammered real bad and you don't always get lucky and have good setups around the corner, you may have to just take that loss and build it back later. So moral of the story is, don't bag hold please! If the trade is going against you, take that loss early and see what you did wrong and learn from it. Letting your winners ride will tremendously accelerate growth in you smaller guys since taking profits early at 5% on a $1000 trade is only $50 bucks. If the stock gives you a potential 40% and you can only get 5% that's still a bad trade. A win is a win but how much you win matters just as much!
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