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Getting stopped out too early and managing risk

QuestionsCategory: QuestionsGetting stopped out too early and managing risk
Evelyn To asked 3 years ago
Hi Pat, Today I got partially stopped out of two of my positions: FUV and APPS.  Let’s talk about APPS.  I bought it at $63.13 and set a 3% Stop Market on $61.3.  As you know, the LOD was around $60.3.  I wanted to protect my risk so I set the stop but as you know, the price went back up and I feel like I may have acted too soon?  I know you also did not give out any Sell Alerts and wanted to better understand what triggers you to sell some especially when the % loss can be up to 5-7%?   The same happened with FUV.  I made a second buy at $23.2.  Today’s LOD for FUV was $20.61, which is a 11% drop from my purchase price.  I automatically got stopped from that position and took the hit at $21.3.  But I also noted that you did not issue any SELL alerts either.  So I’m wondering how to do this better so I don’t get stopped out prematurely (as the market may fix itself) yet also protect myself from any bigger potential loss?  Thanks so much for your wisdom and time.  Really appreciate all that you do!  Evelyn 
1 Answers
Avatar photoOwen Staff answered 3 years ago

Hi Evelyn,
Video from Patrick:
https://youtu.be/8C6UIvR-fNw

Evelyn To replied 3 years ago

Thank you so much for the detailed explanation. Really love your use of videos to explain everything. I did some post analysis and realized that with pyramiding, I should have used my AVERAGE cost as my benchmark for risk management and NOT my last purchase price. So that was a good lesson learned for me… Will always strive to do better and get stronger. I really enjoy being a part of MW and am so thankful for your patience and guidance. Happy weekend and talk to you on Monday! *Cyber hug*