Today, AMD gapped up higher in the pre-market session. Yesterday's close was $23.00 and this morning it gapped up slightly to $23.47. I was watching the 10 minute charts on my real-time scottrade screen and saw a low risk entry.
Entry: $23.32
Stop: $23.17
Initial Risk: $0.15 cents per share
Now 5 minutes after buying AMD ran all the way up to $23.73, I failed to move my stop accordingly to the jump in price, and therefore losing quite a bit of possible profits.
Exit: $23.34
Lesson Learned: After setting initial stop, and the Stock Price continues to move higher, move your stop according. If price jumps $0.70 per share, move stop up 33%, or just divide the run up in price since your entry, divide by 3, and tack that amount onto your inital stop.
Check out : Trailing Stop Rules
1 comment:
Hey Cal,
The AMD trade was very gutsy. Did you trade it again today?
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