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This Will Boost Your Profits and Keep Away Market Pain

"BP, if there's one thing you never want to do as an investor, it's to ride a winner into a loser. That's one of the true cardinal sins of investing."

Chief Investment Strategist Keith Fitz-Gerald made that comment to me late last week, during one of the chat sessions we hold each day an hour or two after the close of the U.S. stock market. Those late-afternoon/early evening discussions began not long after we started working together nearly seven years ago. They quickly became a daily tradition - and we've held to them ever since.

Each day here at our office in Baltimore - as afternoon gives way to dusk, and as my colleagues head home - the phone on my desk will ring. I know that it's Keith even without looking at the Caller ID. The only thing I don't know is what we'll be talking about that day.

We'll do postmortems on that day's financial-market action, talk about new profit opportunities, review the latest news event, and discuss the letters we've received from each of you.

Last Thursday, the topic was this "cardinal sin" of investing - and the reminder that every investor needs to employ "trailing stops."

The conversation was prompted by a couple of notes from Money Map Press readers who'd acted on some of our research - but ignored the trailing-stop settings that are part of every research report we post. And one committed the "cardinal sin" by riding a nice winner into a loser.

"You know, BP, a lot of the so-called experts say it's impossible for individual investors to beat the stock market ... to beat Wall Street. But that's actually not true," Keith told me. "Individual investors could enjoy superior performances - but just don't. That's because they make mistakes that pile up their losses and erode their gains. And riding winners into losers by failing to use trailing stops is one of the best examples of why that occurs."

We actually get a lot of questions about trailing stops here at Private Briefing, which is why we periodically take a day to publish a new bit of research about them, or a case study that shows how they work. Since it's been awhile since we've done that - and because I know we've picked up a lot of new subscribers in the interim - I thought we'd take have Keith tell us about their use.

So I organized a Q&A session with the chief investment strategist and veteran trader, and have posted the results here.

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