Hello Friends! Thanks again for stopping by and I hope you all are having a good Memorial Day. Kind of rainy here in Wisconsin, so I am not sure how the Parade will turn out.
I was thinking this weekend about my "sell strategy" and just as I have some "rules" about selling on the upside, I think that this account is not quick enough to respond to downturns in the market.
First of all, I need to stay with the 8% limit on losses on all new purchases. That seems to be a good way of preserving capital.
Second, once a portion of a stock has sold for a gain, it is important to sell it before it becomes a loss. That is, sell at break-even if I have sold a portion at about a 30% gain.
Next, what about the stocks that are up 60%, 90%, or more? I haven't refined the strategy yet....but what about allowing them to retrace 50% of their gain before selling? For instance, a stock that has had a portion sold at 60% should be allowed to retrace to 30% gain, and a stock with a portion sold at 90%, should be sold before it goes below a 45% gain if possible.
This allows greater flexibility for the issues that make large gains, but also allows for me to sell them with gains present...quicker than going back to break-even.
What do you think? This is my plan for now.
If you have any comments, questions, or other matters you would like to write about, please email me at firstname.lastname@example.org
Have a happy shortened trading week everyone!