Every investor has their own undertake “wise” investing. These suggestions result from experience, and so are designed for the momentum investor instead of those that “buy and forget”.
Never make an effort to fight a trend. It could be tempting to get a falling stock to be able to average your costs. Actually, many investors appear to recommend this type of step. Used, in most situations this only results in throwing good money after bad.
Always have an end loss, for each stock. If your stock moves down, at what price should you definitely sell? If you don’t use historical data and technical analysis to reach at investment decisions, you’ll want at the very least a fixed-amount method. Meaning, before you get you will need to determine how much loss it is possible to comfortably undertake that stock, and stay with it. Never retain a stock position which has moved away from comfort and ease.
As the word goes, care for your losses and the gains will need care of themselves.
Keep an eye on your stocks. Even though your stop loss has been triggered and you also have exited the stock, the stock could reverse trend and begin a brand new uptrend.
As a momentum investor, you need to resort to periodical profit booking. Whenever a stock is losing steam, book profits. Later, if the stock shows signs of picking right up momentum again, it is possible to always enter, even at higher levels. Your decisions derive from the potential upside from that price.
Always understand that there’s an “opportunity cost” to any position. For those who have committed to a stock, you have effectively “blocked” that money from being committed to another stock with, perhaps more, potential.
Once again, to repeat: Care for your losses, and the gains will need care of themselves.