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Hello Crazy Moochers,
My 2007 New Year's resolution was one I managed to keep - well eight times out of 10, anyway. I'm really pleased at that, because I make the same pledge every January 1st - and have never been able to keep it at all before.
The promise I always make to myself is never to hang onto a loser. I give each share only a meagre 7 percent leeway. Most people will tell you that a 7% stop loss is too tight. They say that a 10 or even 15 percent loss is the place to come out.
Well, maybe my 7% losers do come back later. But even though I sell at a 7% loss, I keep my eye on the share. After all, I thought it was a winner once, so presumably many of the same benefits still apply. Even though others did not think so - and the share wobbled.
Having sold a loser in this unforgiving fashion, I am very ready to buy it back if it starts rising again. Even if it fell an awful long way, after I sold it. This is not a dead cat bounce, which are unreliable, but a recovery which is far more attractive to this old punter.
I love recoveries. The share might once have been worth £10, but it falls to 10p. So surely it's not too much to expect that it could rise to 20p. This is a long, long way from the record high. But it still represents a 100% gain. Which is always welcome. Even though a 10 bagger is much more preferable.
Personally, I do not count a 20% profit as a victory. I only get excited by a share which doubles. And they do happen quite a lot, actually. If you do your research and don't take wild guesses. You need all the research help you can get. But you already know that, don't you?
Happy New Year, gang. God bless!
To find out more about Malcolm CLICK HERE
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