Here’s A Case Of Perceived Risk

In order to persevere in the
trading business, we have to

be confident enough in our decision-making process
to pull the trigger when we see the stock setting up. Many strategies end up lending themselves to other
strategies, but quite often one trigger will need less confirmation than the
other strategy. For some this might mean more risk is involved, but quite often
the associated risk (at least in my humble opinion) is more of a mind game and
perception.

Case in point, today I wrote up a low level
reversal entry on Avocent
(
AVCT |
Quote |
Chart |
News |
PowerRating)
. After the 1,2,3 trigger, the issue then set up
as a potential Slim Jim or 2-point continuation entry.

12:49:53


Intraday Setup Alert

Avocent (AVCT)
Is putting in a potential


1,2,3
low on the 5-minute chart. With the stock off 1.10 at 37.75, AVCT is
setting up in the pattern, with session lows slightly thru a 50% Fibonacci
retracement level from the February 24th low.

So, which one was the better entry? I can’t honestly
answer that for anyone but myself. But, I can say this–in a world that demands
stepping up to the plate, and where human nature normally gets in the way of
doing the right thing in the markets, maybe trying on the ‘more risky’ trade
isn’t so risky after all.

Chris Tyler