Hope Knot buys 1000 shares of at $20. It immediately drops to $19½, and naturally, Hope begins to doubt the wisdom of her trade. But hey, Hope also knows has a great future. It’s been steadily moving up all year, and the Internet is as hot as a firecracker. Moreover, every single one of’s technical indicators is pointing as straight up as a Titan rocket. So the market must be wrong—not her. So Hope sits on the stock and on her loss another day and waits for the market to come to its senses.

The next day sags down to $18. This is where it really begins to hurt. Hope knows she has skidded past the point where all of those trading gurus will tell you to exit a trade—with ...

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