My hardest lesson-as a novice position trader with a day job, I tried to acquire a position in NEWP during a run up this past fall for several days with limit orders which never got touched, and finally placed a market order and went to work confident I would have a piece of the uptrend.
If memory serves me well, My market order was executed @ 174, and Newp closed @ 150. When I got in I realized I was down 24, so of course I could not bear to sell at such a loss- So I kept the position open, with limit sells hoping a bounce would get me within the 8% I usually set a stop at. Never happened, and I sold much,much lower. It was a rude awakening, but a lesson well served. While my 8% stop is unthinkable for a daytrader,and most of the members on elitetrader ,it is where I draw the line on position trading, to keep from getting whipsawed. It was the last time I would hang on to a losing position. I learned several lessons then, The most important is to take the loss early on; I now cut my losses before a stop executes if the indicators show weakness. Don't even think twice about it. Newp today is below $30.00 . If I held, I might have broke even as a long-term investor in a decade or so; at least now I still have the option of having more cash to invest elsewhere's. Although the parameters of where to set stops may be different, the key is to set those stops and cut the losses.Good Luck!
