Road my favorite momentum trade YELP into earnings. The earnings report which was a slight miss on expectations but upbeat on the revenue side saw the stock drop after hours but recover immediately looking like the street accepts the report and its back to the races. Whilst listening to the conference call they decide to be caviler for growth and announce a $250mln offering and stick it in my trade. Sold out at the open for a 4% loss.
That is called damage control. Swing the cash into something else. Losses are like bugs swat them. Important to always have an exit point where you are alright with losing that amount of money. Define your risk. When you let it ride the house always wins and in this world the market is the house.
(Note Adding the loss into my previous YELP trade I am still +21%.)