tcd, there are many strategies for selling. I like to see how others handle momentum plays in case there is something I can pick up.
I do have a couple of strategies I use myself. I will use LAM.TO as an example.
I use an indicator referred to as momentum bands. They are like Bollinger Bands, in fact they are, but with a different set up. Instead of a 20 period time frame with 2 deviations, I use 1 deviation. It provides a more narrow range for price movement.
Once price moves above the upper momentum band, you have a stock being driven by momentum traders. I stick with the trade as long as price stays above the upper band.
When price closes below the upper band, I sell 1/2 of my position.
If price moves back up, I buy the position back.
When price closes below the middle band, I sell my remaining 1/2 position because the indicator confirms the upside momentum has petered out.
Another strategy I use is called tracking the lows.
I have an explanation of that here:
Message 23315265
Another strategy is to use price targets, something that is difficult for most people, and then sell when the targets are hit, or sell part and hold the rest using one of the strategies above.
Everyone has their own objectives and time frames. We mst do what we feel comfortable with or what has worked consistently for us in the past.
The strategy I explained above, with regard to the momentum bands is the best I have found for stocks experiencing an explosive up move.
dabum |
