Below is some snips out of the chat room today that may help answer questions about the buy levels etc. This may raise more questions...which is a good thing, and something I probably could do a page explaining....This is unedited lines selected out of dialog.
<Sam> ESRX new lows
<Sam> See how 53 does
<Jay> You don't want it to hold 53 though, you can't buy until 52.9!
<Sam> True
<Sam>Odds are, if 53 is support, it will still spike under.
<Sam> If that makes any sense.
<Jay> Did you see the ESRX reference in the Story Stock on levels?
<Sam> No
<Sam> Here it is: Formed a bullish engulfing pattern on strong volume yesterday – look for near-term resistance just under 55.00.
<Sam> ESRX below now, lots breaking down?
<Sam> 52.90 on ESRX wasn't exactly a randomly picked number, I've tried to write the programming to look at support levels and the stocks range to figure the buy ranges.
<dcowboys> glad its you trying to write it <g>
<Sam> That is part of the reason there are few Cat. 3 stocks that come up on the screening too, the difference between the buy and the stop, and the buy and the target, not large enough to be worth the risk on the calculation. It is something I can adjust if it isn't working...
<Sam> ...then you through in the market risk...which isn't in the calculation...
<Jay> How does it work on something like CBRL, which has been on for two or three days at lower levels each day?
<Sam> It keeps coming up as long as there is a visible level of support, but keeps the stop relative to the buy level for each day. Even if there is still support at a lower level, since your loss would be relative to the day you buy, not relative to what might occur the next day...if that makes sense.
<Sam> I also have moneyflow to thin them out too.
<Jay> That does make sense, Sam
<Sam> And with CBRL you can see the buy level narrow as the stock goes down, each time the risk decreases and the reward increases.
<Sam> Also, just like the reverse (CBRL), on something like AZO, I've raised the buy range consistent with the range as long as it still meets the criteria.
(End of dialog)
So, as a stock moves up or down, it can remain on the watchlist as long as the risk/reward remains good. The buy range and the stops move to stay consistent with the target sell price. If you kept the same recommended stop from last week for AZO for example, the difference between the top of the buy range and that old stop would negate the beneficial risk/reward ratio.
More questions about this can be posted here for everyone or e-mail me, we make an effort to timely answer all e-mail.
Sam
sam@savvy-trader.com |
