In high volatile environment (now), you would often be shaken out of positions, only to see them reverse back in the desired direction. This is not a reason not to honor your stop losses. It is just a reminder that either your timing was inappropriate or that you don’t have an edge in the current market environment and therefore you shouldn’t participate until things change. There are times to buy, there are times to sell, there are times to do nothing.
In bear market, honoring your stop loss will save you form disaster. It will assist you to preserve capital, so you could live to trade another day. In bull market, it will free out money for better trading opportunities.
The only reason to hold a stock in your portfolio is if you would buy it at its current level and there aren’t any better opportunities for your money.
We are experiencing a rare event of market destruction that will lay down the foundations for the greatest wealth-building opportunities in our life time.
After the darkest hour of the night, the sun will rise again.
