How To Become A Trading Genius
Finding a setup and an entry to a trade is only half the battle, or maybe
even less so, than managing the trade once you are in it. Why? Because this is
what is going to determine if you are profitable, over the long term and on a
consistent basis. This is where you must employ strict money management to
protect profits once they occur.
14:43:52
Apollo Group (APOL)
is up over 2 points from the entry in its pullback to the 20-day moving average
we profiled yesterday. APOL is up 3.73 to 42.15 and holds a
3-month
relative strength rank of 92 from TradingMarkets.com.
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Yesterday we alerted that a setup we profiled the prior day had
triggered, and was up more than 2 points from the entry at 40.08. Since the
initial stop would have been placed at 38.00, giving us a risk of 2 points, a
smart trader would have sold half his shares, then moved his stop to his fill
price. This would insure a profit on a 500 share position of $500 (half = 250 X
2 pts.) with the possibility of more on the remaining 250 shares.
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The stock is up nearly another point today, but there was no
guarantee it would not have gone down farther and erased the profits. When your
profit is equal to the amount of your risk, take half off the table and lock in
the rest at breakeven. This will give you more consistent results, and the
ability to maximize the profit potential on the second piece of the position with trailing stops as it moves higher.
Have a happy and safe holiday weekend!
Duke