|
The contents on this page are a small sample of StockTradersHQ's member resources (FREE Trial!)
1.
Our staff of professional technical traders analyze 1,000's of potential stocks every day to provide you with a list of stock picks with the greatest potential for explosive gains.
2. These stockpicks are traded with our real-time portfolio. Email alerts are sent for every entry and exit. Through the member-only website, you will have our support every step of the way.
3. Our subscription service provides all the resources, stock picks and tools an investor needs to make very profitable, consistent trades while maximizing gains and minimizing losses.
SEE OUR TOP PICKS FOR 2006...
|
|
Monday, August 23, 2004
Good evening friends,
Market Recap
Oil prices went down today and that should have pushed the stock market higher. But as usual, the market did not react as the majority thought it should have. With oil prices dropping, the market should have responded positively but that is just too logical. Instead the Dow dropped -37 points, the S&P fell -3 points, and the NASDAQ was flat on the day.
I noticed that many stocks surged ahead only to fall back at the close. This is negative action for these stocks. When stocks breakouts fail and come back to close near the base of the breakout, it usually means the stock needs more time to work before it is ready to breakout. It does not necessarily mean the chart pattern will fail, but it does not put the stock in the best position to move up.
Today was one of those days where some stocks broke out but failed and came back down from the breakout point. As I said in last night's commentary, I do not believe the rally we have seen is a real rally. If there is any good news to the recent rally, it is that the gains seem to be holding up and not selling off. Although there is low volume, there has not been heavy selling into these rallies and that is positive action at least for now.
Gunfight at the OK Corral
We have had a number of people question particular sell points on our trades. Usually this happens as a stock is moving against our position and the volume is at least decent for the day. It may not be making a move on stellar volume, but the move is being made against us. In such cases, I have been exiting the stock based on my original stop loss plan. Sometimes, this will shake us out. Other times, it will prevent us from being trapped in a complete meltdown (or a true reversal).
There are many previous commentaries about “planning to trade and trading the plan”. This is the key message in tonight's commentary as well. If I enter a stock and set up a 2% stop loss, I will stick to that stop loss. If you can keep an eye on your positions all day, you could choose to hold if the volume is far less than average. Those are the type of shake outs that you can avoid if you are looking at your screens. For those who cannot watch your positions throughout the day and make the trade decision in an instant, the physical stop loss you set up can help to save a trade from serious losses if it should go against you.
This is an important point to stress. In a market such as the one we have been in for several months, the preservation of capital is vitally important. Capital preservation is perhaps even more important during this type of market than actually making a profit. Profits will come, but only to those who know enough to hold onto cash through the lean times. We have been fortunate to make some gains by entering short positions: never let anyone tell you there are not gains to be made in a bear market! There is, just not as much as we can make in a bull market.
So, given that preservation of capital is the key to success, we have to remember to stick to our guns. The plan that I have set up is to trade with very tight stop losses in place. If a stock looks like it is going against us, I will dump the position quickly. But as always, the final decision whether to buy or sell any stock rests with each individual trader. If you feel like a stock is being shaken, you have the option to hold, even if I have decided to stick with my stop loss and exit. I have a plan and I will trade that plan. If you try to outsmart the market, you could end up getting hurt in the process. None of us, no matter how good we may think we are, can ever outsmart the market. The Market is the king, and we have to respect the king or we will pay a serious price.
Remember, professional traders have a plan, they will trade that plan, and they are not out there to help us make money. You are trading alone in the market against millions of other traders. It is you against them: no one is looking out for your interests, except you. If you trade your plan, you will survive no matter how rough the market gets. The market pros survive also because they to trade their plan. They stick to their guns. I strongly suggest that you stick to yours; trading against the market without a plan is like showing up to the gun fight with a knife.
OTC BB Watch List
- IOTN
- AVCA
- RIMI (still moving up since last mentioned)
StockCharts Listing
Please vote for us at StockCharts daily, thank-you for taking the time to vote.
http://stockcharts.com/def/servlet/Favorites.CServ...
Please tell a friend about our service. We would like to become a referral service only. With your help, we can be. As always, thank-you for your support past, present and future! Have a great night everyone; we'll see you all tomorrow evening.
|
|
|
|
|
|
|
