Why It Can Be Worthwhile To Wait For Entry
Sometimes it really can be ‘too easy’ when
the stock that you’ve been stalking, finally triggers. But remember, success
doesn’t come easy. It was discipline that got you in the so called ‘easy trade’
in the first place, and it’s the discipline to apply the same thoroughness to
your exit strategy, that ultimately makes the trade consistently worthwhile.
Don’t let a solid winner ‘take you down the river,’ after being happily
upstream.
While Tim Truebenbach has been on vacation, many
of the high-caliber growth stocks that he monitors have moved higher out of
solid basing patterns. One such stock that I found all by myself, and put up on
TM’s
Intermediate-Term trader report was Digital River
(
DRIV |
Quote |
Chart |
News |
PowerRating). I’ve
had the stock on my list for over two weeks, as I patiently waited for the stock
to trigger out of the pattern.
With an alert set slightly below the prior highs
used for potential triggers I quickly pulled the stock up on multiple time
frames to see if the situation was still worthy of ‘jumping in the water.’
Upon confirmation that the current looked strong
enough for the paddle upstream, the initial alert went out to the chat room as
DRIV pushed above the trigger point on substantial volume.
If only they could all move that nicely out of
our triggers. The patience pays off, but now that we go from passively
monitoring a potential trade, to enjoying a nice profitable position, it’s time
to be equally disciplined in our money management strategy. This might
call for aggressive taking of profits on a piece of our newfound wealth at the
5% level, such as Tim uses in his breakouts. Maybe your style is for tighter or
looser position management, but one thing is for sure, don’t let a strong
current dry up, and leave you floating back down the river without knowing ahead
of time, where you plan on getting out of the water.
…and of course, for those of you who only wish
to jump in for a little ‘quicky’, a stock that is acting this well will usually
provide more than one intraday opportunity to get on board.
12:30:05
Intraday
Setup Alert
Digital River (DRIV)
surged thru it’s IT
Report handle pivot of 20.20 on substantial intraday volume. The stock
is now consolidating a small triangle
formation. This action has the stock approaching the Cup highs of 21.94 from
January 2002. Triggers out of the current pattern are set at 21.45, with DRIV up
2.51 at 21.37.
Now that really was ‘too easy!!!’