The Importance of Stop Loss

In this current thread, the third idea is having a stop loss... and using it.

Not every trade will work out. When it doesn't, selling your losing position while it is manageable is preferable to watching your stock tumble into the basement and being hit with a total loss.

Have a specific and reasonable stop loss. Use it! Don't hope for something to bounce back because it may not. Just sell the stock and move on.

Remember, most of the time, 80% of your profits come from 20% of your trades. If you let even one bad trade go down 50%, that means your next trade has to double just to break even.