Handling Losses

Losses are part of the game.  But they are frustrating. I had two last month that were particularily frustrating.  INVN and WFM.  The reason that both are so frustrating is that I had decent gains before giving them up and winding up with a small loss in each position.  

INVN was one of those momentum stocks where you have to sell when you are ahead and every thing looks like its going higher.  WFM is the type of trade that is going to happen.  I was right on the technicals and the trade moved in my direction until Goldman Sachs downgraded it, which took my stop out.

Although frustrating, I stuck to my plan and did not let a small loss turn large.  The result is that these trades only did minimal damage to the account.  My winners more than made up for these losses.  Had I attempted to rationalize or hold on, I would have seen another 1.50 or more lost in INVN.

That's the point.  Losses will happen.  If the rules are followed, who cares? The winners will make more than make up for them.