Welcome!
One aspect of portfolio management that is overlooked by many traders is having stop losses on their positions.
Hard stop losses protect you from catastrophic losses.
Just a quick example:
Stock price: $100
Soft target: $130 (+30%)
Stop loss: $90 (-10%)
3 to 1 ratio, if the stock price goes to $90 you will exit the position.
In this way, you know exactly how much you risk by putting the position on.
This strategy of “soft target and stop-loss“ should be put in place for each position.
Because each position has a clear stop-loss then the entire portfolio has a stop-loss.
This is a very simple concept, but many traders have a problem implementing it. No one wants to accept that they have a losing trade and because of it they prolong the period and the risk and losing % of that position is greater than the 10% impose in the beginning. The “hope“ of reversal is the emotional enemy.
Prolonging the period of a losing position not only that it will increase the $ amount of loss in that position, but also your money is blocked in that position and you can not take another position because of it. Losing money and losing time.
In order to optimize not being stopped out of a position, you need to choose very well the time when you put the position on. Optimize the timing of entry into the position.
You need to have some flexibility when you choose your stop-losses because the Beta (volatility) in stocks differ.
Try to be detached and unemotional when you need to exit a position.
Being disciplined with cutting the losing positions will protect your portfolio.
Be well.