My NO.1 trading rule
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No. 1 Trading rule of my dad: Use stop loss for both cutting the losses and trailing the profits.
From looking at my dad for years I have learned that stop loss is most important thing in possibly any business. It is more like the most obvious but universal rule. However, people(including me) always forget about it. People believe in thier taken position so much that they are willing to risk every single one of their penny on thier investments. But usually either end up loosing it all or get stuck in a low zone where their investments are of less worth then the stop loss values.
With a stop loss you will get a second chance with half(depends on set value of SL) of your money. Where others will get stuck in a stock without SL(stop loss) and wait for years for thier position to rise up, you can always use the remaining of amount to invest in something else. With a SL you make sure that even when you are not looking at your position 24*7 you will still be able to save your half of funds in case of your portfolio crash.
With a trailing stop loss however you will assure that you will always end up with a profit no matter what, in case your portfolio goes up and later crashes. You don't need a bloomberg live terminal, an economist or an expert trader to learn the trading rules. You can read some news and just go with your instincts but with a trailing SL and pick any position you like. Greed and fear is always there and will be there forever to influence your judgement, but the SL will always be a there to take the most logical decision on your behalf.
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