Today, I employed one technique in consistent profitable trading. This technique is practiced by even the top traders but is not practiced by many retail investors. This technique is really part of the DNA of successful investors but many investors do not like this technique. What is this technique? Well this technique is none other than the technique to “cut loss”.
In view of the expected stocks markets volatility, I am “cutting loss” so as to redeploy my capital into some better counters, counters which will be priced attractively as a result of the movements of the stocks markets. When one realizes one has entered a losing trade, one should quickly realize his mistake and “cut loss”. One should not hope that Mr Market will come back to move the stock north. One should not hold a losing stock thinking that the stock price will rebound back. Often and speaking ......