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By Dave Landry | TradingMarkets.com
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Dave Landry is principal of Sentive Trading, a money management firm, and a principal of Harvest Capital Management. Mr. Landry is the author of two top selling books, Dave Landry's 10 Best Swing Trader Patterns And Strategies and Dave Landry On Swing Trading. If you would like a free trial to Dave's Nightly Swing Trading Alerts Report click here or call 888-484-8220 ext. 1.

More Keys to trading success: Money Management, Risk Control, Letting Positions Work, and Smoke 'em If You Got 'em!

Talx Corp. (TALX | Quote | Chart | News | PowerRating), mentioned last week (email me if you need a link), provides more examples of recently discussed lessons. Notice the stock triggers an entry (1)--waiting for entries helps ensure that the stock is headed in the right direction (at least for the time being!) A protective stop (2) is used just in case you are wrong. Notice that it is placed outside of the "normal" volatility to help being stopped out on noise alone. The stock didn't do much for a few days (3). However, as I preach, if you micro manage and exit early, you'll never catch stocks that (eventually) turn into big winners. Notice the stock gaps open and quickly hits the profit target (4). In a case like this, when a stock is moving extremely fast, it's okay to let the stock run in order to possibly squeeze out some additional profits (5). At this juncture, the trailing stop is now tightened to breakeven(6)--the same level as the entry. So far, so good. If the stock trades below this level, you'll get taken out at a scratch (barring overnight gaps). If it turns back up, you have the chance to participate in a possible homerun.

For more information on the concepts discussed above, email me for a swing trading primer.

On Friday, the Nasdaq ended lower but off of its worst levels.

Ditto for the Ps.

So what do we do? The big blue arrows continue to point up. Most sectors remain constructive. And, the ones that are in bona fide downtrend are the ones you want to go down anyway--commodity related stocks. Continue to look to buy the market but wait for entries just in case this correction hasn't ran its course.

As far as setups, Family Dollar Stores (FDO | Quote | Chart | News | PowerRating), where people go to buy crap, looks poised to resume its uptrend out of a pullback/TKO.

Best of luck with your trading on Monday!

Dave Landry

dave@davelandry.com

P.S. Reminder: Protective stops on every trade!

P.P.S. If you would like a free trial to my trading service, click here.

>> See more articles by Dave Landry
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