Carl’s Quick Tips – #7

7. PAPER PROFITS

Nothing is better than taking on a new trade and having it move quickly to a highly profitable position. However, if you are not in control of your emotions this euphoric state can lead to imagining even greater profits. This can lead to great disappointment if the stock retraces some of the gains. Remember that it is never wrong to take profits. Even after the initial run-up you could have sold half your position. If the stock price continues upward you can sell into these higher levels. If it does backfill after the initial run-up you can then determine whether you wish to replace the stock you sold.