Cut your loss short

Cut your loss short is the insurance for trading stocks.Let me give you an example.
Suppose you bought 100 shares of a given stock, let say xyz at $40 dollars on Monday. On Tuesday the price was $41. So what do you wnat to do. Take this small profit or stay longer for further profit. The market shows you a profit so wait until the trend changes direction. After few days, the price is at $45. That's good. this strategy is called let your profits run.
One day the price went down to $44.Here you must sell. Why? because you do not know what will happen the next day. How do I know? Well the price went down so the right thing to do is to get out and have your profit. This is what we call cut your loss short. The only thing here is that it is not easy to do what I am saying. If you let your fear and hope guide you, you can never apply this strategy. All losers do not apply it, although it seems easy.