This Is One Way To Close Your Unprofitable Positions

  • March 15, 2005
  • Tsutae Kamada

Last night I mentioned
Amazon.com (AMZN) as a potential buy for Tuesday. The stock appeared
to be forming a 1-2-3 bottom on its daily chart, and it formed bullish bars two
consecutive days. My plan was to buy AMZN as soon as it traded above 34.75.

Now let’s see the 5-minute chart from today’s session. Shortly after the opening
bell, AMZN took out 34.75. It was a nice start. But, the stock immediately
reversed to the downside. The 9:45 bar decisively broke down below a rising
trendline and formed a bearish wide range bar. This was one good place to close
our positions instead of waiting for the stock to hit originally planned stop
prices.

It is important to follow your trading plan. But don’t forget to adjust it if
the market conditions change.

T.Kamada

If you have questions, feel free to
mail them to me.