Don't try to go against the flow.
It might be tempting to buy a stock that is going down so that you can spread out your costs. In fact, a lot of investors seem to suggest taking this step. In reality, most of the time this just means throwing good money after bad.
Every stock should always have a stop loss. If the price of your stock goes down, at what point do you have to sell? You must have at least a fixed-amount method if you don't use historical data and technical analysis to make investment decisions. Before you buy a stock, you have to decide how much of a loss you can handle and stick to that number.
Don't hold on to a stock position that has moved past the point where you feel comfortable.
Take care of your losses and the profits will take care of themselves, as the saying goes.
Watch over your stocks. Even if your stop loss order was hit and you sold the stock, it could change direction and start going up again.
As a momentum investor, you should occasionally cash in your profits. When a stock is losing steam, sell it and take the money. Later, if the stock looks like it's starting to move up again, you can always buy, even at higher prices. Your decisions are based on how much you think the price could go up.
Always keep in mind that every position has a "opportunity cost." If you buy a stock, you have effectively "blocked" that money from being used to buy another stock that may have more potential.
Again, to say it again: If you take care of your losses, your profits will take care of themselves.
