When we are in a trade, do I adjust my stop price up as the share price climbs?

Our stop prices are placed at very specific levels. Levels that are set based on fundamental analysis at the time of our entry into the trade. These levels are set just below strong levels of support on the charts so that if the stock pulls back down there is a good chance that it will then find support again and bounce BEFORE it hits our stop price. If we just blindly move our stop price up (and now it is ABOVE a support line) because we are making money one day, it stands a good chance that the stop will be hit, even when the story for the stock hasn’t changed. Now you run the risk of being stopped out only to see it reverse again immediately.

That being said, occasionally we do move our stop prices up to be sure and lock in some gains in case the market reverses. However, we don’t blindly set a trailing stop loss. To reiterate, we do move our stops up from time to time and post those updates to the Wanderer on Watch trade setups page.

See our article on using stops to manage risk.