I usually don’t write subject lines like this. But I want to stress the importance of this message. As you know, I’m a momentum investor. So, I always ensure that I play by very specific rules with each and every trade. For example, with Surge Point Trader, we set 7% trailing stops or hard stops on every recommendation. The reason: We instantly define our risk. We know exactly how much we can lose in the event a trade doesn’t work out. But there’s a bigger reason to use these stops.
Life.
Life comes at you fast. There will be tough days. There will be family emergencies. There will be events that pull you away from the market. And if something significant happens in the market, you want to have the peace of mind to know that your trades can execute without you.
I regret to say that my little dog Dagny is passing away. We thought that it would be another 30 days, but the severity has forced our hand to let her go tomorrow. I must admit that I’m not rational right now. And when you’re not rational, you can and will make investment and trading mistakes. But while I am with my family celebrating her life, I am protected in the event that something significant happens in the market. Trailing stops help us prepare for life – the good and the bad.
Dagny has been with us for six years. She used to visit my office right at the food of the Chicago Mercantile Exchange. She hung outside of Cactus, a famous trading bar in Chicago that carries the very special warning “Don’t Drink and Trade”. She has listened to me talk about options more than my wife has.
At this moment – to be honest – the last thing I’m thinking about is my stock portfolio or if I want to trade a vertical spread on Apple. Having rules like trailing stops allows the benefit of doing so. I’ll be back tomorrow to talk a little about the difference between trailing stops and hard stops. For now, it’s beautiful outside, and we’re going to take a walk in the sun.
