Rally Recess – Blueprint 7-7-2014
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About Jeff White
Jeff White started trading in 1998 and resides in the Dallas/Ft. Worth area with his wife and two sons. Twitter / Google+ / Facebook / StockTwits
Hi Jeff
I’m enjoying and getting a lot out of your chart analysis,so far even more than your stock pics. In terms of the stock selections, you give a price break that you would initiate a position but you don’t give a target (unless it’s understood that you want to retake a recent high) nor do you give a stop price. Now, I realize that not everyone could honor the same stop based on their account size, position size and risk etc. but it just seems that a breakout price, target and stop would be a complete package. Thanks
Jerry
Good morning Jerry, thanks for the positive feedback here, always appreciated!
With swing trades, I always give the complete game plan since I’m going on the daily chart and expect those plays to pan out over the course of several days or sometimes weeks. Those come with the entry, stop, and targets, making them much more of the “set it and forget it” types of plays.
With the single-day plays, the best guideline for exits is at http://thestockbandit.com/day-trading-strategy/ and you’ll find that in general terms I’m giving them 1% against me and looking for a multiple of that (3-5%) on the profit side. I like that multiple, plus it’s well within the realm of a normal move for the stocks I trade.
The problem is that so much of it depends on the broad market action the next day, which obviously I don’t know the night before. The majority of the moves are going to be dependent on market direction and momentum (longs trigger and run in a strong tape, etc.), so managing them boils down to the intraday chart….higher highs, rising support, momentum runs too hot, price stalls out, etc.
What I do is begin with the 1% stop from entry and just manage based on the intraday chart (3min or 5min is fine), watching to see if a trend can develop. If price spikes big, then it’s prone to reversal, so I aim to lighten up into that spike. If price stalls out and the day is passing by, then the window of potential for movement is closing. If rising support breaks or a lower high forms or the prior pullback low is broken, then I have reasons to stop out. And if price ends up in that 45-degree angle trend, then I can stay with it and those often end up being the biggest winners.
Does this help to explain?