Stop losses

Stop losses - those bloody things we love to hate.

Today reminded me why we had them and why they need to be there even if we 'think' we know better.

As mentioned yesterday, I exited my Impala Platinum calls after they took a bit of a pasting in early morning trade. The moment I sold out, I had this 'sellers remorse' and was certain that the US bailout would all be approved and the market would turn around and fly.

Bailout occured
Market bounced... A bit
The next day market lost momentum
Impala started trading down even further

Nobody likes selling at a loss and feeling like they called it wrong. But we all do it and the sooner we get over ourselves and admit that we made a mistake the better it is for our trading sanity.

It might not feel like it at the time but stop losses really are there to help you preserve your capital. Find your system and stick to it.