Note that stops can be set on either an intraday basis or a closing basis. Marc recommends setting trailing stops on a closing basis to avoid getting shaken out of solid stocks by market noise during the trading day. And in the same spirit, while trailing stops can save investors from catastrophe, Marc doesn't recommend using them on all of your positions. If you are a dividend reinvestor, sharp downturns like the one we witnessed last March could actually set you up for long-term profits. Consider this... If the stock you previously bought at $60 plummets to $45 in a prolonged market rout that isn't specific to the business, and if the company's fundamentals and dividend-paying abilities haven't changed, you have a unique opportunity. Your dividends will be able to buy more shares, which will generate more dividends, which will be able to buy more shares... This process turbocharges the compounding machine - and in this case, selling when your stock hit $45 would interrupt your profits. But in both cases - whether you kept your stop at $45 or you decided to hold that stock for the long haul and reinvest the dividends - there was a strategy at play. You would have factored in your risk tolerance and long-term financial goals to decide on the exit strategy that worked for you, sparing yourself the agony of emotional decision making down the road. Click here to see this week's episode of State of the Market and learn more about when it pays to use trailing stops. Good investing, Mable P.S. On September 23, Marc and Chief Investment Strategist Alexander Green will sit down with a mysterious investing pro who believes his signature system could help Oxford Club readers score up to 4X more on all of their regular trades. This powerful system takes trailing stops to a whole new level. If you're interested in potentially limiting your risk in this overheated market, you'll want to see this. | 
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