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Avoid Selling At the Highs

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January 05, 2012 – Comments (0) | RELATED TICKERS: MTG

SAY WHAT!?!

That is correct sir (or ma'am), avoid the pitfall of needing to get out at the highs with every trade. Because guess what? You'll fail at it 99.9% of the time. 

So often we try to get out at the top, mainly because of the pain and anguish we've experienced in the past of when we sell a trade, make some nice coin off of it, only for it to go higher and then lose out on the opportunity to have doubled or tripled our gains by having held on longer.

Then we take that painful memory and we apply it to future trades. Instead of scaling out gradually, or selling a stock on strength, we instead, keep trying to get every dime we can out of the the stock and remembering what happened last time we got out too early. We see a huge push higher, and instead of selling half a position, we start fantasizing about what could be, if if it goes up another 10%, 20, or 30%. 

But let me tell you, getting out too early is 99% of the time, better than getting out too late. 

Most often when trading breakout plays, they can offer you the world and then pumel you with an iron fist. I traded MTG today for a nice 4.25% gain, but I could have made more than 10% had I stuck with the trade.

Here's the rest of the post and MTG chart

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