You work hard day in and day out to support yourself and your family. You’re proud of how you’ve woken up early every day and stayed late at the office, earning promotions and pay raises along the way. You’ve managed to save up a bundle of money for your retirement, your children’s college education, and perhaps even a down payment for your kids’ homes.
Now that you’ve set yourself up with substantial savings, you’re ready to build upon your wealth. You know the only way to do that in a significant way is to start investing. But how exactly do you get into it, and what steps do you have to take to make sure you don’t lose it all?
First, as a beginner trader, you want to do as much as possible to safeguard yourself from losses. Unlike expert traders, you don’t have the knowledge or experience to take huge risks when you trade. Since you worked for so many years to make your money, you don’t want to do anything too risky with it. For traders, they may be working with hundreds of thousands of dollars or even millions in their accounts. For you, you’re cooking with gas, because if you lose your money, you may not be able to get it back for years, if at all.
Cue trailing stops. Trailing stops are a way to shield yourself from risk while at the same time allowing you to trade on the markets and gain that valuable experience you need. There are a few methods for using trailing stops, but the best one is from Michael Robinson. Before you take his advice, just look at his extensive background in the financial business.
Who Is Michael Robinson?
Michael Robinson is the founder of Nova-X Report, a subscription service that delivers members with expert advice on how to invest their money and build real wealth. He is one of the top technology financial analysts in the world, and he uses his position to pass on his knowledge to his readers.
Michael Robinson gained his knowledge by working in Silicon Valley for 34 years. When major technological innovations that were transforming the world were emerging, he was there as an early witness. He was one of only five people involved in early meetings for the $160 billion cloud computing industry. Michael Robinson was there with Dave DeWalt, the CEO of McAfee, right before Intel acquired McAfee for a whopping $7.8 billion. And he was side by side with Lee Iacocca and Roger Smith, the CEOs of Chrysler and GM, when they were leading the robotics revolution that ended up saving the automotive industry in the United States.
Prior to providing readers with information on Nova-X Report, Michael Robinson edited the financial newsletter American Wealth Underground. He was the first analyst to discover the rare earth mineral crisis, which led to cumulative gains of 990% for his subscribers in only 16 months.
And that’s not all. Michael Robinson, who was the proud recipient of an honors economics degree from the University of Missouri at Columbia, is also a Pulitzer Prize-nominated writer and reporter who wrote: “Overdrawn: The Bailout of American Savings.” He’s written for The New York Times and The Wall Street Journal as well.
Through his many years in Silicon Valley, and seeing what companies failed and which ones succeeded, Michael Robinson has amassed a wealth of information about protecting yourself from losses. That’s why he came up with his trailing stops guidelines.
What Are Trailing Stops?
A trailing stop is an order you put in place to sell or buy a security if it starts going in an unfavorable direction. Trailing stops will, on their own, adjust the security of its current market price. This gives the investor the chance to make a greater profit or limit their losses.
When you’re trading, you can say whether you want the trailing stop level to occur in the form of a certain percentage of a security or a dollar amount. Michael Robinson recommends a percentage amount, which we’ll dive into later.
If you want to limit your losses or increase your profits, you have to use trailing stops in the right way. If you decide on a trailing stop level that is too big, you will lose more if the security goes in the wrong direction. If your stop level is too tight, you may accidentally sell your security before it has the potential to fully flourish and make you money.
The main advantage of using trail stops is because you’re not a psychic, and you don’t know where the market is going. Though you can use expert information from Michael Robinson to make the best predictions possible, you never know what will change. The markets can always fluctuate in the blink of an eye. And you don’t want to lose your hard-earned money that quickly, or at all. You want to get out while you can.
Once you become a seasoned trader like Michael Robinson, you can figure out how to spot the best trends out there and get a little riskier with your investments. Until then, utilize trailing stops to your advantage.
Now, let’s look at how Michael Robinson recommends using trailing stops.
Using 20-25% Trailing Stops
In all his time in Silicon Valley and learning the financial markets, Michael Robinson has determined that a trailing stop percentage of 20-25% is the key to success. He believes that below 20% is too low, or cautious, and above 25% is too high, or risky.
For example, let’s say you have a trailing stock at 10%. A stock price increases exponentially, but because you played it too safe, you weren’t able to benefit. Or, you’re going to lose money because you couldn’t wait for a stock to go back to its normal levels. There are always normal fluctuations, and you don’t want to sell your security too early if it’s just going through some regular movement.
Now, let’s look at the opposite scenario. You have at trailing stop percentage set at 35%. Risking that much is going to put you in a negative financial situation if you don’t buy or sell your security at the right time. Don’t take that big of a risk out the gate.
As Michael Robinson says, “The most direct path to building a fortune is not losing your money in the first place.”
If you use trailing stops, even at the recommended 20-25%, that doesn’t mean you can never invest in a certain security ever again. Security might just not be doing well at the moment. For example, in the tech world, maybe CEO of Tesla Elon Musk just tweeted something outrageous and his stock plummeted, or Facebook just announced a new policy that doesn’t protect users’ private data. You can always reinvest when a company is doing well again, so don’t worry on that front. Just worry about protecting your money.
Learning More About Investing with Michael Robinson’s Nova-X Report
Though you may feel like an expert on trailing stops now, there is still a lot you can learn about trailing stops, investments, the tech industry, and much, much more. Don’t stop your financial education with the end of this article. Instead, subscribe to Michael Robinson’s Nova-X Report to keep learning the essential and expert knowledge about investing and building your wealth.
Here’s what happens when you become a Nova-X Report subscriber: You’ll go to your inbox, see an email from Michael Robinson, and know right away what securities to invest in to build your portfolio. You won’t need to spend hours online, scouring the internet for expert information, because it’s right in your inbox. You don’t need to look up the bios of so-called “experts” online, because you know Michael Robinson has the track record to back up what he’s recommending to you.
If you’re ready to take your hard-earned money and start maximizing its potential in ways you could only dream of, make sure you subscribe to Nova-X Report today. You won’t regret it.