Don’t get married to ANY stocks ….ever
I have made some giant mistakes by thinking that a particular symbol is going to bring me the big bucks, just because it has done so in the past.
Trade the chart and the price action and NOT the company, especially if you’re scalping or day trading.
Don’t get me wrong; if you swing a stock of course EPS, news will matter but even then do not get attached to ANY company.
If the stock’s action doesn’t pan out the way you wanted it, GET OUT! This will save you a lot of money and frustration.
Take a look at my experience.
I made over a $1000 over a couple of days just day trading $FREE. Then I bought it on a dip (which I thought was the bottom) and it dipped more. But instead of selling it right away – since it didn’t pan out the way I wanted it to – I kept it and watched it tanking in 2 days.
I felt I was completely paralyzed. But of course I wasn’t. I didn’t sell the stock because I made money on it before and I wanted to make money again, ignoring the sign of heavy volume.
Not cutting your losses is what kills your account.
I don’t mean that one day you wake up and your account is down to zero.
No, a lot worse. Your account is getting slowly chipped away.
It kind of reminds me the scientific fact that proves when you put a frog into hot water it will jump out but when you put the frog in cold water and slowly heated up the frog will stay there and slowly die.
That’s exactly what will happen to you and to your account if you don’t cut losses quickly.
You will be wiped out and out of this game before you know it.
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