Powerful Lesson: Using Trailing Stops to Protect Gains
Practical and Effective.
One of the most powerful and actionable learnings for me trading previous down markets is how the use of trailing stops would have helped me to reduce drawdowns significantly. It can be used on part of or all of a position.
Other techniques include selling covered calls on counter rallies to generate income. I highlighted yesterday about the premiums on RDDT being attractive.
I have not used that enough recently, so I am going to start deploying that technique now. $RDDT is one I have been trading around and currently I own it at $131/share (not accounting for gains taken). CC’s yesterday, but I am likely to bring in a physical stop on the rest of my shares; I will probably keep inching it up. Conversely, the stop can be placed at breakdown of a key support or moving average instead of at your breakeven.
$RDDT does not have technical support as yet, and so I just want to take care of my downside because if something like $META can fall to 13x earnings as it did last week, other stocks can fall much lower too.
Ensure to revisit this post also:
Thank you for reading, leave a like and see you for the next one!