I want to share with you a trade from September that holds a lesson for us all.
The stock is STEC. I shorted it at 40.17 in mid-September. A week later, I covered the short at 30.22 for a nice profit. The stock had fallen about 25%.
Here's an updated chart (STEC is, I think, the top percentage loser today on the market, or at least very close to it):
The lesson is the same for bull and bear market alike – – it makes sense to adjust stops as a position moves in your favor. I am much, much better about this (especially for shorts) than I used to be. But closing a short because It Sure Has Gone Down a Lot isn't a good reason to do so.
