How important is setting a stop loss for day trading?
It could mean the difference between success and failure. Too often I hear stories from fellow day traders about how much money they “almost made”. Well we’re not here to “almost make” money, we want to actually do it.
When I ask what happened, I’m nearly always greeted by a story talking about the high of the day, and the low of the day, and how they ended up selling closer to the latter. Why? Because human nature dictates that we need to collect as much money as we can. So they naturally hold on to the stocks past their prime in hopes that it will just shoot back to the moon.
Day trading is an in and out entity. You get in, you cash in, you cash up, and you cash out. Sticking that stop loss on your orders is imperative to success, and I hear too many stories about guys losing the “big one” because they were too bullish to have a little common sense.