Editor's note: When it comes to money, people never learn...

As our colleague and True Wealth editor Steve Sjuggerud said in yesterday's Masters Series, "Humans experience the same money mistakes over and over, throughout history."

Despite the recent pullback, Steve still believes this historic bull market will end in a "Melt Up" – an incredible blow-off top. The problem is, most folks won't know when to get out.

So today, we're sharing more from the most recent issue of True Wealth. In it, Steve details what happened to many individual investors during the last Melt Up. And as you'll see, one powerful tool can eliminate the worrying and guesswork when the time comes to sell...

This Simple Mistake Could Eliminate All Your 'Melt Up' Gains

By Steve Sjuggerud, editor, True Wealth

In early 2000, the call I made about "the greatest financial mania" was pretty darn good...

We were in the greatest financial mania of our lifetimes. And stocks did peak, six or seven weeks after my newsletter went out.

Importantly – even though I said it was the greatest mania in our lifetimes – I did not say "sell." My subscribers stayed on board through the peak in March – for all of those gains.

We exited nearly all of our stock positions within a month after the peak. We followed our exit strategy (which at the time was primarily using trailing stops). And we managed to keep a massive amount of gains.

As one example, subscribers who followed our advice locked in triple-digit gains on shares of JDS Uniphase. The stock went up roughly 1,200% for our readers, and we used a 25% trailing stop... closing out our position with about a 900% gain.

Here's the thing, though...

Most individual investors didn't pocket their gains. Instead of getting out when I told them to, they held on – all the way down. They were hoping for a bounce that never came.

The tech-heavy Nasdaq stock index lost three-fourths of its value in the following years. And many of the high-flying names that people fell in love with lost much more than that – if they even survived.

Many subscribers have confessed to me that they didn't follow our advice to sell JDS Uniphase. The stock had treated them so well, selling felt like going out and shooting the family pet. They couldn't imagine getting rid of it. So instead, they watched the stock fall more than 90%.

Making matters worse, many of them waited to buy the stock. They didn't buy until very late. So more folks than I would probably want to hear about actually lost a lot of money – on what was a big winner.

I share these stories because history will repeat... or at least rhyme. Millions of investors will arrive to this party late.

Even worse, they will not want to sell on the way down. So they will end up losing far more by holding on during the bust than they will ever make on the way up.

I saw it happen in the last Melt Up. JDS Uniphase is a perfect example. And I'm certain it will happen again.

This time around, I don't want that to happen to you.

Imagine your friends sitting around you. Look to your left... Now, look to your right. Both of those friends are about to lose a lot of money. Don't be like them.

Please stick with my advice. Stay on board for the Melt Up. But when the time comes to sell, promise yourself that you will follow my recommendation – and sell.

Selling will absolutely feel like the wrong thing to do at that moment. It will be painful. All of your friends will be "buying the dip." You will be the odd man out.

When I recommend selling, you will find all kinds of reasons to disagree with me. All of your reasons will ultimately come down to this...

You will be having so much fun making so much money, you won't want it to end.

Unfortunately, that's the way it works... The moment you feel the strongest conviction to buy the dip will likely be the moment when it's time to get out.

You won't want to hear it when I make the call. But it's what we'll have to do.

So... when will the day come? The answer to this question is tougher than you think...

Two Ivy League economists set out to find the answer. They wrote a book about it, called This Time Is Different: Eight Centuries of Financial Folly.

They studied all the booms and busts of history. Their conclusion? Bubbles end when they end.

More specifically, they end when investor confidence disappears. That's it.

There is no magic number that tells you when it's over. It's different every time. The bubble ends when investors lose confidence.

Determining that moment is incredibly hard.

So our plan is to ride it all the way to the peak – and a bit through the peak. It's what I recommended to my readers last time around. And for those who followed my advice, it's what allowed profits of 900% in JDS Uniphase.

To do this, we only need one tool... our trailing stops.

This might seem too simple. But it's the best way to determine the peak – and walk away with the biggest gains.

Importantly, trailing stops ensure we'll get out a bit after the peak... But again, that's perfectly fine.

We want to be on board when the Melt Up trend is going up. And then, after it has started its downtrend, we will exit (if we haven't already).

What do I mean by waiting for the trend to turn down? Let's take a look at the stock market (through the S&P 500 Index) during the last two major busts – 2000 and 2008.

Here's a chart of the stock market over those two eras, with a simple trend line (a 10-month moving average) laid over it...

My friend, if you simply owned stocks when the trend line was going up – and you didn't own them when the trend line was going down – then you would have made A LOT of money.

Trailing stops don't track this perfectly, but the idea behind them is similar.

Our stop prices rise alongside market prices. But when stocks fall, our stops hold steady. And when stock prices fall too far – when they hit the point we set for them – they tell us to sell.

No worrying. No guesswork. We'll stay in a little past the peak, then sell.

Still, the question remains... When will that day come?

It's impossible to know for sure. But like I explained yesterday, if my mother-in-law raving about her Apple shares is any indicator, we're certainly getting closer.

When euphoria ramps up, stocks can rally higher than you can imagine. And we want to be along for the ride. You want to own stocks in a big way – right now.

But at the same time, it's important to start preparing for what comes next.

Good investing,

Steve Sjuggerud

Editor's note: You should start using trailing stops immediately if you don't already. They'll allow you to sleep much easier at night. But as useful as trailing stops can be, they aren't perfect. Fortunately, there's a better way to maximize your portfolio's potential...

Steve explained all the details in a recent interview. If you have any money invested in the stock market today, you won't want to miss it... He details what you can do right now to make sure you're prepared for the next "Melt Down." Watch the full interview right here.