Trader, Protect Thyself
In a choppy market, breakouts from consolidations sometimes do not last for
long. Therefore, daytraders want to jump on the breakout and lock in profits
before they evaporate. Earlier this morning we saw such an opportunity in
DuPont Photomasks
(
DPMI |
Quote |
Chart |
News |
PowerRating).
Â
10:37:36
Intraday Setup Alert
DuPont Photomasks (DPMI)
is forming a pennant at its intraday high. DPMI is now up 3.81 to 51.49.
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DPMI breaks out of the pattern for a quick move of about 1
point, before sliding back to the downside.
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The idea here is to not let a position that was profitable turn
into a loss. At worst, once the position moved a half point or so in your favor,
you should move your protective stop to break even (your entry price). At this
rate, the worst you do is scratch a trade if the stock reverses. While this can
be aggravating, it is a lot less painful than watching what was a winning trade
turn into a loser.
Until tomorrow,
Duke
P.S. Be sure and join Larry Connors today as he hosts the
inaugural edition of TraderTalk in the traders chat room. Check
the homepage tomorrow for log in information, and log in by 4:25 PM ET to tune
in as Larry discusses how to time the market short-term by using the VIX.
Click here to go to the TraderTalk homepage for more information and a
schedule of future forums.