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Conservative? Use Stop Losses & covered calls

After fundamental analysis to identify good companies and technical analysis to identify buy/sell timing, the best way to protect stock trades on downside is to use stop losses. Check on your brokerage website for details and read any of the investing books that discusses how to use technical analysis for choosing a stop. If you already own a solid company whose stock price is trading sideways and you don't mind possibly having to sell it, consider selling covered calls on the stock. Sort of renting out the stock - you are selling someone the right to buy your stock in the future at a predetermined price, but in the mean time you can potentially make several % per month. With covered calls, use mental stops to exit the trade. Can get higher returns but more risk with some of the other options strategies. Must know what you are doing with options and have a clear exit strategy for trades, otherwise worse than gambling. I'll look up couple of books for consideration....
 

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Phil Town Rule #1 for Investing
John Murphy Technical Analysis of Financial Markets
Martin Pring Technical Analysis Explained
Don't have weblinks for any of these, but Phil Town's book is a
good place to start. Martin Pring's book is aimed at making buy/
sell decisions.
 
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