It Pays to Stay With Winners: How I Trail Stops to Ride a Trend
Everybody wants the perfect entry. Perfect buy point. Perfect stop.
That obsession is exactly how you get shaken out of the stocks that can change your year.
ENLT is a great example. It’s an energy name with poor earnings but huge sales, and the trend has been the story. The weekly chart is basically straight up, and price has been respecting the 10 week moving average as support.
The real edge is not “where did you buy.” The edge is how you manage the trade once you’re right.
The simple trailing stop method I use on the daily chart
Yes, you can trail a moving average. That works.
But when a stock is acting like a leader, I like something even more straightforward:
When price makes a new high (white lines on the chart)
I move my stop up to the prior higher low (orange line on the chart)
That’s it.
It keeps you in the trend longer because you’re letting price action tell you where the trade is wrong, instead of letting noise knock you out.
Why this matters more than your entry
You could have gotten into ENLT earlier. You could have gotten in later. It doesn’t really matter.
What matters is that you had a plan to stay with it as long as it kept printing higher highs and higher lows.
Big winners are rare. When you catch one, you don’t want to donate it back because you were micromanaging the stop or panicking on normal pullbacks.
The dirty secret of monster returns
A recent U.S. Investing Championship winner put up roughly 1,000% in a year while only being right around 22% of the time.
Read that again.
They didn’t win by being right a lot. They won because they cut losses fast and let winners run.
That’s the whole game.
Big winners allow you to lose a lot and still make money. But only if you manage them like winners.
