Exit in to strength

When trading a momentum burst kind of setup exit in to strength is one of the better options I have found. These momentum bursts moves by very nature are short term moves. They last only 3 to 5 days and in that short period make 8 to 20% moves. FDML is an example of a recent momentum burst trade I did. In this case it had a high volume breakout on 7th January. That was the entry day. Next day stock went up at one stage almost around 14%. 14% gain for one day of holding a stock for swing trade is very good gains. So I sold 3/4th position at 23.50 and moved stop to 23 which was subsequently hit during the day. Giving overall profit of 12.93% for holding for …

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When trading a momentum burst kind of setup exit in to strength is one of the better options I have found. These momentum bursts moves by very nature are short term moves. They last only 3 to 5 days and in that short period make 8 to 20% moves.

FDML is an example of a recent momentum burst trade I did. In this case it had a high volume breakout on 7th January. That was the entry day.

Next day stock went up at one stage almost around 14%. 14% gain for one day of holding a stock for swing trade is very good gains. So I sold 3/4th position at 23.50 and moved stop to 23 which was subsequently hit during the day. Giving overall profit of 12.93% for holding for essentially less than 24 hours.

Next day stock was downgraded and open lower. If the position was open , it would have been a loss or wiping out open profit.

This kind of short term swing trades where you try and capture slice of a explosive move are not for everyone. There are lot of people who believe you should let profit run. Which is right philosophy for a position trade or a trend following method. It is not the right approach for swing traders.

If I select stock based on some catalyst and position trading it, then I am willing to give it lot of room and let profit run. For example I am still holding FB bought in July 2013 on earnings day and letting profit run.

If you are serious about your trading and want to build an enduring edge the Stockbee Member site might help you. The most recommended site for learning to trade. www.stockbee.biz 2100 members and growing everyday…

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Exit in to strength

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