Here’s How A Trading Method Can Evolve
Just because you enjoy following one
person’s style of trading, doesn’t mean you can’t add to it. I find that I
like to mix it up with certain strategies, but the one thing that never changes
is proper money management.
Kevin Haggerty’s strategies are very popular,
because time and time again, they work consistently when applying his rules.
I’ve personally found that his trade ideas ‘mesh’ with the way I see things in
the marketplace. Through literally thousands of alerts during my time on the
‘Wire’, his setups have given me complete confidence in executing those trades
that show up, each and every day. But, as I’ve ‘matured’, I have also found a
new ‘wrinkle’ to trade one of his most familiar strategies.
The TrapDoor strategy is known in Kevin’s module
as one of several Opening
Reversal strategies to take advantage of extreme price action when it sets
up within a well-defined pattern that has various technical supports to confirm
the formation, and potential entry. I love the pattern, for me it’s like
dangling candy in front of a baby. With that success, the strategy has evolved
to include stocks and trades that might not otherwise be considered, but that I
have found to work incredibly well.
Specifically, I look for news stocks that are
moving intraday into extreme price zones or technical levels using the familiar
TrapDoor pattern, just as I would if I were trading the opening minutes of
trade. When news strikes a stock intraday, the moves are often exaggerated and
lend themselves quite nicely to the original strategy. A word of caution though,
with company-specific news moving the stock, this is not a strategy for the
faint at heart. You must have a strong idea of the liquidity when you apply the
rules to this kind of situation, and be in absolute control of your risk
management. Otherwise, you might just find yourself needing some extra
‘assistance’ down the road.
In the TM
chat room today, I alerted our subscribers to Sunrise Assisted Living
(
SRZ |
Quote |
Chart |
News |
PowerRating).
The stock was experiencing an intraday ‘trapdoor’ situation due to news that
there might be accounting problems surfacing.
Kevin wouldn’t call it ‘too easy’, and neither
should you, but it just might be worth considering the next time ‘they’ decide
to show a stock the door.