Here is an example of mismanagement of a position because of failure to follow Basing Point procedures. Also a little of Ahmed’s Dilemma was involved (i.e., whether to trade or ride the trend). We bought C close to the bottom in March and sold it in late June for a decent profit. That was not smart.
The simplest Basing Point method and wave analysis says you should still be long C. The Basing Point in April was never taken out, but we got antsy when we saw that string of down days in June and traded instead of holding on.
Pretty obvious, actually. Upwave from March bottom, Basing Point in March, another in April then the real downwave to the July low. If this is not clear to you read the StairStops book.
Smarting a little we are inclined to re-enter. But with a toe, not a foot. And see how it goes. A technical case may be made for this, as it appears that a bottom is in and the price has passed the necklines with a little gap.
Fortunately everything we do is not mawkish. Our Ford and Bank of America, bought as lottery tickets in the great crash, show profits in the range of 300-500%. Oh, and we are still long FNM and FRE.