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Hi, Ken
I'm in your trading room most days. Love it, you're doing a great job. I have a question that may be of interest to many other daytraders.
Often, I find myself in a momentum trade where, after 3/4 of a point climb or more, the stock seems to pause, maybe even downtick a level or two, where I usually get shaken out, only to find the stock promptly shoot up another 3/4 point or more. It is pretty frustrating, as you can imagine.
It seems prudent and conservative to close the position when the momentum first pauses, but it also seems such a shame to waste the best part of a winning trade, miss the full potential. So, my question is, do you recommend selling at the first major pause, or holding longer? How do you evaluate the trade at the pause and make your decision? Sometimes I have held at the first pause, only to see the stock head south and blow much if not all of my profit, sometimes even turning a win into a loss in a fast stock. You know about those stop losses..... sometimes easier said than done.
I think the answer lies in knowing the potential of the trade, so you might like to address that subject. I think few of us really know how to properly ascertain the true potential. Too many times we're asking you for your target. And often the trade surpasses your target. So, I guess I'm asking should we be very conservative, or on the other hand how do we know when to play the longer term play and set a realistic target?
Lastly, in your training manual you mention that you use scanning software (something you referred to as "scammer"). I suppose this is for filtering news, top gainers and losers, and for spotting morning gaps. Can you give more information about some scanning software you might recommend that we checkout for ourselves? I think it would be helpful if we could set up our own scans, know the reason behind the stocks we're trading. Might save a lot of the chatter in your room, causing you less distraction and allowing you to focus on your work.
Thanks,
Bill
(WilliamD in your room) |
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