THE NEED TO PLACE STOP LOSS
Following with the series of articles on risk management in stock exchange investments in this article, I want to talk about how to place the stops correctly when we launch a stock exchange operation.
Stop loss must be placed whenever we do a stock exchange operation. With this rule there are no excuses because if we start doing operations without their corresponding stop loss, even once, our mind will play a trick on us and when we get used to not putting stops we will not put any.
This is a big mistake for beginners, neglecting stops, and it is the number one risk management rule that we should never skip. Not putting our stops in a stock market operation is the same as jumping into the void without a protection network. Our life is in danger, and in the case of investments our capital, which has taken so much effort to accumulate, is in danger.
As the price of our share goes up we can release part of the risk we had assumed and finally when we release all the risk we will have an action in positive, with gains, and we can consider carrying out a study to include new investments in our portfolio.
