So I invested in a stock that was heading upwards

[Duffman316]

I just invested in a stock that was trending upwards (NASDAQ:ABCO) and it seems like it's turning the other way the moment after I invested in it

Anyone else ever experience these moments?

Looked good to me on macd, adx, and moving averages

 

[tomorton]

Hi Duffman -

This happens to everybody. Shares go down as well as up.

Of course, you must have had good reasons to get in long, but these are not predictors of what will happen, they are predictors of what will probably happen but might not. So, on every trade, you have to know at what share price you would get out and how much money that means you would be risking. The risk to your capital should not be so large that a series of losing trades would wipe you out, or take away the chance to trade back to break-even. It's good to be able to see your exit price justified by technical analysis on the chart. Small losses are bad but not as bad as big losses. It's also good to be able to see where you would take the profits and close the position, but there are no hard and fast rules to help with that one.

Anyway, what are you going to do?

 

[Duffman316]

Hi Duffman -

This happens to everybody. Shares go down as well as up.

Of course, you must have had good reasons to get in long, but these are not predictors of what will happen, they are predictors of what will probably happen but might not. So, on every trade, you have to know at what share price you would get out and how much money that means you would be risking. The risk to your capital should not be so large that a series of losing trades would wipe you out, or take away the chance to trade back to break-even. It's good to be able to see your exit price justified by technical analysis on the chart. Small losses are bad but not as bad as big losses. It's also good to be able to see where you would take the profits and close the position, but there are no hard and fast rules to help with that one.

Anyway, what are you going to do?

Greetings Tomorton,

I've placed a sell stop order just below the 20 day ema to cut losses, if it hits that it sells

learned a long time ago not to put all my eggs in one basket and to stick to a few risk management rules as opposed to letting emotions rule my decisions :smart:

this is the first trade i've placed in about 8 months after taking some time off to tweak some code i've been working on to help me with my trades

 

[tomorton]

All sounds very rational.