Trade 1`
Short GILD GILD again. Third day in a row.
GILD gaped down at open. Moved higher and collapsed.
Entry 71.51
Stop 71.80 This is a wide stop!. So to mitigate risk we took
a smaller position than we would normally take.
We were stopped out in a minute! lost -.31
This is where your position sizing come into play.If not this would 've
been a devastating blow.You have to control your risk.
Second entry.
Even though GILD took us out we realised it was drifting down
again.
Entry 71.75
Stop 71.80 More palatable stop .
We went in with full position.
Target 1 71.50 We took 1/2 +.23
Target 2 71.25 1/4 +.55
Target 3 71.00 Never hit .Covered more +.45
Lowered stop to 71.50 Stopped out rest for +.25
risk/Return =.05/55 = 1100%
We were well ahead of the game even after taking a lose the first time
becasue of intelligent share sizing.
See how GILD took off from exactly where we covered!.
Trade 2 How to trade a stock when you missed the train.
Short DHI From our watch list.
We were watching DHI to go long.It bounced off prematurely
just below 18. Our entry was 17.80 .We thought we missed the
train and just let it go .We were looking for other opportunities
when DHI reversed and dropped to 17.77 ,just under our entry
and then took off.We didn't see it until it was half way up.
We never chase stocks,but we were stalking it waiting for it to
run out of gas.
Entry 18.97
Stop 19.10
Target 1 18.80 1/2 +.18
Target 2 18.60 1/4 +.37
Target 3 18.45 1/4 +.52
risk/Return .13/52 =400%
DHI dropped to 18.41 before bouncing off.
Rather than chasing DHI higher we were patiently waiting
for an ambush and it paid off. Not as much as if we went long.
But half a loaf is better than no bread at all.
Remember: You never chase stocks for a trade.Let the trade
come to you.
