Bruce asked 7 years ago
Pat Walker Staff answered 7 years ago
Good morning Wiwi!
I thank you for the question and the kind birthday wishes! Several key points. I would NOT give my stock that much room for a stop. That is is 20% stop. Way too much. Keep your stops at 7% or LESS. This keeps you in the game. There is another factor to this tactic. It is crucial we buy at the RIGHT spot. We look for really clean bases that everyone can see. They act on it at that pivot. And the price PUSHES away. After we are up even a couple points we move our stop up to breakeven. We will NOT lose. 2% may be too small of a rise. 2% on a 20 dollar stock is 40 cents. Bit too tight.
It's also a function of the type of stock. We have to give AMZN, GOOGL, etc. more wiggle room than most other stocks. In most instances, after the stock has moved up 5% or more I will move stock up to breakeven. Frequently I will move it up to the lows of the day. I have a hard and fast rule. If I buy a stock, I do NOT want it taking out the lows of the day. If it goes up next day, I will CONTINUE raising the stop. Also, I will sell a little into strength, for a profit. This assures I will make money on the trade. I hope this helps. I will post chart examples in our site to help you also!
Sincerely,
Pat
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