Cut Your Losses While You Can

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By

Owain Bennallack

Published in Investing Strategy on 11 February 2013

VIDEO: Owain Bennallack finds out The Naked Trader's top investing tip.

Owain Bennallack chats with Robbie Burns, author of The Naked Trader, about his particular method of investing.

The Motley Fool has just released a brand-new special free report to help power your retirement portfolio. To find out the name of the FTSE 100 share we're tipping to boost your income, simply click here to have it delivered to your inbox, completely free.

Click below to watch Robbie and Owain's video

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UrbanDreamer 11 Feb 2013 , 9:42am

I suppose that it was too much to hope for.

Madly I assumed that the Fool would continue to use the word VIDEO in the description when the "read more" link lead to a video.

UncleEbenezer 11 Feb 2013 , 9:49am

Now I want a facility to recommend (as on the boards) UrbanDreamer's comment!

Sidekicker101 11 Feb 2013 , 12:51pm

Lol. For today's top tip, I'm going to give you a tip that every trader has heard a million times over. Awesome advice. ;)

AleisterCrowley 11 Feb 2013 , 2:02pm

If you're going to do this I reckon an automatic sliding stop loss is the best way, as it takes emotion out of the equation - but if the fundamentals/outlook haven't changed significantly, why sell ?

lotontech 11 Feb 2013 , 4:59pm

I have a lot of respect for Robbie, and in the past I would have been the first to agree that it's a good idea to "cut your losses". Now I'm not so sure-- not because it's a very un-Foolish thing to do, but for the reasons outlined here: http://goo.gl/fb/hnUpi

SevenPillars 12 Feb 2013 , 9:40am

It is probably easier to cut losers quickly when you have a track record of winners and you are making money out of the market, because to a large degree playing the market is a confidence game and the confidence to do something tends to come from winning. Those new to investing and trading do not have this and psychologically you have to be very strong to give up on "losers", which unless you've chosen a real dog may well come back as soon as you've sold them.

Having a winning account record probably makes it easier to cut losses, although everyone hates losing of course.

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