What Growth Momentum Traders DON’T Do
There are thousands of posts about what traders should do.
Let’s talk about what we do not do.
We do not sit through massive Stage 4 declines. We do not average down in broken stocks. We do not marry positions. We do not wait decades to get back to even.
At one time, General Electric was considered one of the safest companies in America. Blue chip. Institutional favorite. A “forever” stock.
It peaked in 2000.
If you bought near the highs and held, you waited decades just to see price approach those levels again. Adjusted for inflation, you are still not truly made whole. From the inflation adjusted breakeven level, the stock would need to rise another 57 percent just to restore purchasing power.
That is the hidden cost of buy and hold without risk management.
This can happen to any stock.
There are no permanent leaders. Capital rotates. Industries evolve. Institutions move on.
Growth momentum trading is built differently.
We cut losses short. We follow the trend. We concentrate in strength. We protect capital.
A great company can be a bad stock. A bad company can be a good stock.
Ideally, we want both at the same time. A strong company in a confirmed Stage 2 advance.
That is where real compounding happens.
William O’Neil said it best:
“There are no good stocks unless they go up in price. If they go down instead, you have to cut your losses fast.”
