How to Manage a Winning Trade

As vain as I can be at times, I do realize that not every reader of what I contribute here rushes out and follows my every recommendation.

That is as it should be.

The picks here are just suggestions, and you should always do your own research and assess the suitability of any recommendations I might make for your own portfolio, personal situation, and risk tolerance.

However, one of the things that I try to do occasionally is to walk you through my thought process as I manage a position.

I know that that might seem pointless if you don’t have the position, but I do it in the hope that it helps you with position management in general, something that I believe to be the most important element of trading and investing.

I have said before that while trade choice is important, it is position management that really separates those who make money and those who don’t. Success in trading is about minimizing losses when they come and making the most out of profitable positions.

The first part of that is actually not that hard. It is really just about setting and sticking to stops. The second part, though, running a winner, is more nuanced, and therefore more challenging. Take, for example, something I bought and wrote about three or four months ago.

Back in September, I recommended establishing a long position in Energy Transfer LP (ET). The logic was that it was attractive in two ways.