Monday, March 23, 2009

Why you use a stop


(Double Click Picture for a Larger View)
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Stock:ES emini
Entry Bar: open
Entry Green Line:783 short
Stop Red Line: 790
Result:
stopped out
Notes: Great example of using a stop. I took a small position to fade the gap this AM, decent risk reward even though I dont like fading gaps on Mondays. As you can see I placed a stop, I didn't "assume" the gap would fill at some point. You take your loss and move onto the next day or play. Not placing a stop and you would have been crushed today as the market did not stop moving up. Taking losses is part of the game. Its a marathon not a sprint.

* The setup grade is based on rules outlined in my business plan & not for the end result. Feel free to post any trades you made today that you would like commented on.

Learn to trade gaps

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Disclaimer

I DO NOT MAKE RECOMMENDATIONS TO BUY OR SELL SECURITIES - I JUST POST TRADES I MAKE OR FIT THE RULES OF MY TRADING PLAN ON A DAILY BASIS. DO YOUR OWN DUE DILIGENCE - YOU ARE RESPONSIBLE FOR YOUR TRADES, INVESTMENTS, AND DECISIONS! ALL CHARTS COURTESY OF TRADESTATION, SCHWAb & TD AMERITRADE