Thank the ladies for having stops

With the Dow Jones Industrial Average dropping over 400 points, readers are wondering how could there be anything good to write about. In fact, there is something positive, it could have been much worse for me personally.

Last year, in 2006, I suffered through the May-July market downturn because I did not have any stop losses on my positions. Thankfully, after this experience, all of the ladies in unison made sure that going forward I would always have some type of stop on every position.

Fast forward to today, having those stops in place took me out of many trades during the first and second hour when there was plenty of volume to cover the trades. Had I waited until the debacle of the final hour, it's quite likely I would be a nervous wreck tonight. But instead, I have a 50% cash position, and I will sleep better knowing that a few friends saved me a bunch of money.

Whether you use mechanical, trailing, hard, order, or paper stops. ALWAYS have them. Because there will more days like today in the future, that you will wish you had them.