When I started learning on stock trading, the concept of stop loss strikes me hard because I did not put a stop loss order to protect myself in my past trading experience. There is a saying, "The survival of trading depends on how long you can keep yourself in the trading game, not the amount of money you have". So, it is important that we have a stop loss to protect our capital and minimize our risk exposure.
I posted 2 days ago that STX PO Gap Up in the singapore stock market. I did initiate a position the day earlier when there was a entry signal in my screening rule. A gap up coupled with a break out from previous high is usually a strong signal that the stock is moving up. However, there is some downsize that we might be wrong, so, it is important that we have a stop loss order to protect our trading capital in case.
For me, my stop loss was initiated because the market suffered big decline after inflation news in US and oil price reaching new high. The counter went down further, but luckily my stop loss was initiated at a much higher price, protecting myself from bigger loss. I am happy with that.
A key learning here, always always have a stop loss order in any open position that you have.
DISCLAIMER: This information does not constitute an offer or solicitation to buy or sell. You should do your own analysis on top of my postings.
I recently came accross your blog and have been reading along. I thought I would leave my first comment. I dont know what to say except that I have enjoyed reading. Nice blog.
Tim Ramsey
Hi Tim,
Thank you for your compliment. It is good to hear that you like my blog, that motivates me to continue learning and posting.
You have a great blog too.
KP