You must Plan ALL your exits BEFORE you enter any trades or investments!! If you don’t perform this simple act before you enter your positions, not only will you be unable to evaluate the effectiveness of your decisions, but you will likely find yourself either paralyzed in fear or experiencing panic as the market continues to cause your account to lose value faster than you previously thought possible. This may sound like a simple horror story, but the simple truth is nearly ALL SUCCESSFUL TRADERS go through a period of “serious losses” because they were either careless or they made emotional mistakes in their trading and investing. The consequence of this truth, however, is that when we accept we are going to lose before we learn what works, we can consciously make risk-averse decisions when we start learning how to identify behaviors that bring us more consistently succesful results.
One of the best things to remember when you are trading is… “DON’T GET GREEDY!”. When you are trading the goal is to make money. Once you have made your money, DO NOT make the mistake of waiting around to see if a few more percentages can be gained. LOAD UP YOUR PROFITS AND GET OUT OF THE TRADE! You should exit a trade once you hit the targets you planned out during the planning phase of your trade.