A stop loss order is the primary tool employed to define risk on a per-position basis. If you accept the idea that anything can happen at any time when holding any security, you accept the risk that a security can go to zero in a very short time.
If you accept that risk, you work on proper sizing of the position relative to total account equity, and you always use a protective stop loss order.
Position size-- "how much" or "what percentage" of total tradeable account equity to place on one position-- is THE primary tool for controlling risk. Correct sizing is key.
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...based on trends...
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SIRI is challenging a well-established resistance level of 6.70 set late in January 2005.
If it can clear 6.70 on a closing basis on higher-than-average volume, anything can happen.
If you want to lock down a profit, you may consider selling some percentage of your total position at a price that looks good.
Many early holders of MSFT did exactly this. Others, perhaps more astute and certainly more patient, stayed on the long-term trend and rode it all the way to 2000-2001 when the uptrend ended.
These are the people that got 40X on their money over approximately 10 years.
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Long-term MSFT chart with 200 day moving average
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