New book by Larry Connors Click here Improve your trading - See how
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
P.S. Reminder: Protective stops on every trade!
P.P.S. If you would like a free trial to my trading service, click here.
About TradingMarkets | Contact | Advertise | Careers | Link to Us | Site Map | Help | Terms & Conditions | Privacy Policy | Return Policy | Testimonials | Feedback
The Connors Group, Inc. ("Company") is not an investment advisory service, nor a registered investment advisor or broker-dealer and does not purport to tell or suggest which securities or currencies customers should buy or sell for themselves. The analysts and employees or affiliates of Company may hold positions in the stocks, currencies or industries discussed here. You understand and acknowledge that there is a very high degree of risk involved in trading securities and/or currencies. The Company, the authors, the publisher, and all affiliates of Company assume no responsibility or liability for your trading and investment results. Factual statements on the Company's website, or in its publications, are made as of the date stated and are subject to change without notice.
It should not be assumed that the methods, techniques, or indicators presented in these products will be profitable or that they will not result in losses. Past results of any individual trader or trading system published by Company are not indicative of future returns by that trader or system, and are not indicative of future returns which be realized by you. In addition, the indicators, strategies, columns, articles and all other features of Company's products (collectively, the "Information") are provided for informational and educational purposes only and should not be construed as investment advice. Examples presented on Company's website are for educational purposes only. Such set-ups are not solicitations of any order to buy or sell. Accordingly, you should not rely solely on the Information in making any investment. Rather, you should use the Information only as a starting point for doing additional independent research in order to allow you to form your own opinion regarding investments. You should always check with your licensed financial advisor and tax advisor to determine the suitability of any investment.
HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN INHERENT LIMITATIONS. UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED RESULTS DO NOT REPRESENT ACTUAL TRADING AND MAY NOT BE IMPACTED BY BROKERAGE AND OTHER SLIPPAGE FEES. ALSO, SINCE THE TRADES HAVE NOT ACTUALLY BEEN EXECUTED, THE RESULTS MAY HAVE UNDER- OR OVER-COMPENSATED FOR THE IMPACT, IF ANY, OF CERTAIN MARKET FACTORS, SUCH AS LACK OF LIQUIDITY. SIMULATED TRADING PROGRAMS IN GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT OF HINDSIGHT. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFITS OR LOSSES SIMILAR TO THOSE SHOWN.
The Connors Group, Inc.
10 Exchange Place, Suite 1800
Jersey City, NJ 07302
© Copyright 2009 The Connors Group, Inc.
