Stop Letting Big Winners Turn Into Small Winners
Minervini’s “Breakeven or Better” Rule
One of the biggest mistakes traders make is this.
They finally catch a big winner…
Then they watch half the profit disappear because they never adjusted their stop.
Mark Minervini teaches a simple rule to prevent this.
Breakeven or Better.
Here’s how it works.
Let’s say you buy a stock at $50 coming out of a base.
You set your initial stop 8% lower at $46 to control risk.
Now the trade begins to work.
The stock moves 8%… then 16%… then 24% higher.
While price is rising, something important is happening behind the scenes.
The 50-day moving average is rising too.
Eventually the 50-day line catches up to your breakeven price of $50.
At that moment the trade changes.
Your stop is no longer the original stop.
Your stop now becomes the 50-day moving average.
From that point forward the rule becomes simple.
Breakeven or Better.
Many traders will wait for a close below the 50-day before exiting.
Some even watch how the stock closes by the end of the week to avoid getting shaken out.
The key idea is this.
The 50-day moving average becomes your trailing stop.
It rises with the trend and protects your profits while still giving the stock room to move.
The chart below shows an example using CRDO.
Initial risk: 8% Total gain captured: 165%
That’s roughly a 20R trade.
This is how traders stay in large multi-month winners without giving everything back.
The goal is not to sell the exact top.
The goal is simple.
Never let a good gain turn into a loss.
