let’s say you are long at $50, minor levels of support are 49.50 and $49.  Major support is $45.  The stock drops to $48 – now if you had a 30k account, and did 1000 shares, you’re down $2K.  Are you ok holding to see if $45 holds? Probably not.  You exit.  It bounces.  You lost when you didn’t need to.  What about 500 shares? How about 250? At 250 shares you’re probably good – but now you need a decent bump to $52 to get a decent return.  See how it all goes together?

1 min read
Mark As Read
Share post
Like post