Adjusting Your Stop-Loss Upward: What I Learned From Trading Posco

I sold Posco (PKX) shares after my stop-loss was triggered at $80.00 per share on 01.03.2007.

Well that was a sprint to my price target for Posco….

On November 11th my price target was $82.16 (November 2nd closing price of $71.20 x 1.154 = $82.16). Once my price target was hit on 12.14.2006, I put in a stop loss of 3% on that price. The price continued to increase from there to a 52-week high of $86.16 on 12.18.2006.

As a lesson learned, I should have adjusted my stop-loss upward so that I could have locked in additional gains as the price continued to move upwards. I will make sure I incorporate this into any future trades.

Overall summary of trade:

Bought @ 73.73 on 11.07.2006 (S&P value of 1,382.84)
Sold @ 80.00 on 01.03.2007 (S&P value of 1,416.60)
Actual return of 8.5% or 3.5 multiple over the S&P 500 gain of 2.4%