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A good trade gone bad...why to take profit and set stop loss

By aerosdg - Posted on February 15th, 2008
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I figure since it's here I might as well post to it. I made my first trade ever June 1st 2007, with literally no previous trading or investing experience but a very strong interest in investments. I convinced my father that AAPL was a buy at 115 and I was going to do the same. So he invested relatively a good amount of money in AAPL at 115. Then I found margin and began to day trade his account. This was a disaster. I basically saw buys in #AT and would dump 10k on it, soon to realize I should have been exiting shortly as well, but I didnt really understand this at the time. I couldn't read candlesticks or technical indicators other than MACD, and barely understood the concept of this. To get down to the meat of it. I lost a bunch of money on margin. But, I have literally spent hours and hours a day reading about trading, investing, economics, etc etc etc and my knowledge has increased 1000% since. Much help in #AT as well. Thanks everyone... Im finally starting to recover and making good consistent trades regularly now.

One specific trade that I learned a lot from was BCSI. I watched this stock rise up from June to Oct over 100% and then split. I bought it shortly after the split and it continued to rise. This was great, I was doing great. Trailing Stop??? Don't need one. This stocks going to 60s. Then the market took a turn downward and BCSI followed right with it. I blew past my profits, never having taken any. So I kept saying to myself, it will turn around, it will turn. Just hang in there, and I sat watching it go from 45 at my purchase price to 30 before I finally said I need to get out of this...this stock made up 40% of my capital. STOP LOSS AND TAKE PROFITS.

peace -aeros

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Options would make a
Submitted by LiveWire293 on Mon, 03/03/2008 - 03:46.

Options would make a difference in your trading. Try a Collar on AAPL; it'll save you a bundle, and (almost) guarantee your profit. In Dec. 07 I sold 1 210 January call, and bought 1 190 January put to protect my 100 shares. Cost: under $1. I do this month by month, careful to keep my cost low on Apple's high volitility stock. I'm down about $1,100 from the top, and have cash from sale of puts to buy more share of AAPL at under $130 when I'm ready. Calls paid for the puts. Collars are better than worry on such high volatility issues. Losses occur if the issue turns flat for a while.