Wednesday, February 27, 2013

Stocks Scream Higher

Dow up 130 points so far. My long trade that I dumped last week would have now made a profit, but I wasn't willing to risk losing $1000 per contract, so I took a $25 loss instead.
Additionally, I've made a handsome profit buying on the reversal last Friday. I've made far more than I lost in that trade.
Often we overlook that by exiting a trade and taking a small loss, we  set ourselves up for much larger profits when the target contract returns to the prevailing trend. I have learned to "buy the dip" in a trend when prices drop and then return to trend. We miss the opportunity of buying at a reduced price.