The Most Important Rule in Trading: Walk Away at Your Daily Stop Loss
In trading, the simplest rule can also be the hardest: walk away when you hit your daily stop loss. It sounds easy, but in the moment, emotions can override logic. Yet if you can’t step back after a loss, one bad day can easily wipe out the gains from ten good ones.
Think of it like getting a flat tire. You wouldn’t slash the other three tires just because one went flat. The same goes for your trading account—accept the loss, cut your losses, and walk away. This is what keeps you in control, protects your gains, and ensures you can trade tomorrow.
This morning, US stock futures hint at a subdued open as investors digest recent inflation numbers and await insights from Federal Reserve Chair Jerome Powell’s upcoming comments.
In Wednesday’s session, the S&P 500 and Dow Jones gained slightly, while the Nasdaq dipped. The Labor Department’s October report showed consumer prices rising in line with expectations, which bolstered hopes of a Fed rate cut in December. Following this report, the 2-year Treasury yield slipped, while the 10- and 30-year yields edged higher. Analysts remain cautious about potential inflationary impacts of policy changes anticipated under the new Trump administration, especially following Republicans’ recent victory securing a House majority.
As the GOP prepares to control both legislative chambers, Trump’s policy agenda—which includes significant tax cuts, deregulation, and tariffs on imports—appears on a smoother path. However, with a “razor-thin majority,” Democrats may still influence key legislative actions in the Senate, where a 60-vote threshold remains to break filibusters.
On the corporate front, Cisco Systems shares edged down slightly in after-hours trading. Although Cisco raised its full-year revenue guidance to $55.3-$56.3 billion, the midpoint fell just shy of Wall Street’s $55.9 billion forecast. Investors focused on Cisco’s efforts to revive order volumes after a dip caused by inventory reductions. The tech giant’s fiscal Q2 guidance came in line with expectations, and despite a 6% revenue drop, earnings beat forecasts, with Cisco stock up over 17% year-to-date.
At OP, we’re thrilled to share the news of our successful $87 entry on DIS in September, now yielding impressive gains—congratulations to everyone who took part! Today looks like a great day to lock in profits.
Today, investors will keep a close watch on Fed Chair Jerome Powell’s speech in Texas. The Fed recently cut interest rates by 25 basis points, citing “somewhat elevated” inflation but balanced economic risks. Powell’s insights on inflation trends could shape rate expectations, especially as some anticipate that Trump’s proposals may drive prices upward, potentially keeping rates steady for longer.
Elsewhere, oil prices are dipping, influenced by global demand concerns and boosted production. OPEC recently lowered its oil demand forecast for 2024 and 2025, primarily due to reduced demand from China. Later today, the International Energy Agency will release its monthly report, and the EIA will publish its weekly US oil stockpile data, postponed due to Monday’s Veterans Day holiday.
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