Yes, I actually spent two hours producing a video on taking a loss in our short trade of Herbalife (HLF). Why? Because there is value in it. To be a successful trader you need to appreciate risk and money management and at the root of the process is knowing when to cut losses.
So, lets begin. When trading stocks is it O.K. to take a loss? YES! When they are small! Admit that you are wrong fast. Humility is a stock traders best friend. In this analysis of my Herbalife (HLF) trade we took a small loss and are happy to say that we did. When you compare a 2.5% loss in Herbalife relative to our trades in Tesla (TSLA) which we have traded multiple times short in October for an average of a 6% gain. Or Facebook which we consider an investment longer term we have booked profits on a portion of our position and sit with a profit in excess of 160% today. Quantum Fuel Systems (QTWW) we have booked profits in excess of 100% and sit with a current profit of 160% of remaining shares. The name of the game is open your position with a small opening position to test the stocks performance. Know your exit strategy and set the stop loss on your computer. Keep emotion out of it!
Check out my videos on the other swing trades mentioned.
Contratulations Members on not allowing a small loss to turn into a big loss!
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