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Cushion Requirements and Strong Follow Through Requirements

QuestionsCategory: QuestionsCushion Requirements and Strong Follow Through Requirements
John Reiter asked 4 years ago
Good Evening Pat and Owen, First, thank you for all of your continued guidance.  I really appreciate all of the help you give us on a daily basis.  I have been blessed to find such helpful and enthusiastic teachers! I have two questions tonight.  First, how much of a cushion do you typically require to carry into earnings?   Today, you sold SQ because you mentioned you had no cushion.  I did the same in TWLO where I only had a 7% cushion.   Do you require 10% or more?  As a note, I got lucky twice here.   First, TWLO ended up dropping after hours so that decision worked out.  Then, SQ announced earnings a day EARLY, but it is up 10% after hours, so I got all of that move.  Hopefully it sticks tomorrow. The second question is in regards to holding, without strong follow through action after a breakout.  I may have been too impatient, but today I sold CIEN because of lack of a strong follow through.  Do you require your stocks to follow through after the break out day?   And do you often sell stocks that show sideways movement, after you have given them a few days, in favor of stronger stocks or other breakouts? Thank you for your thoughts and time. Have a great night, John
1 Answers
Avatar photoOwen Staff answered 4 years ago

Hi John,
Pat made this video for you:
https://youtu.be/Cptm1_AKSaI