The Key to Big Profits: Trade Management

Good traders can make money even with poor stocks if they use an effective trade management system.

By JAMES "REV SHARK" DEPORRE Nov 23, 2019 | 10:00 AM EST

When designing a trade management system there are two key issues to keep in mind.

The first is that no system is perfect. There will be times when you close out a position at the exact bottom and there will be times when you will buy at the exact top. It is the nature of the beast. It is impossible to avoid suboptimal results at various times. The market is constantly undergoing changes and what works best will vary greatly depending on the character of the market action.
When we pick a stock to buy we are hopeful that our fundamental and technical research is correct but, very frequently, we will be wrong. Research will help us find stocks but trade management is the way to make sure that they make us richer and not poorer.