Dan Zanger’s 10 Golden Rules
1. Make sure the stock has a well formed base or pattern. 2.Buy the stock as it moves over the trend line of that base or pattern and make sure that volume is above recent trend shortly after this "breakout" occurs. Never pay up by more than 5% above the trend line. You should also get to know your stock's thirty day moving average volume. 3.Be very quick to sell your stock should it return back under the trend line or breakout point. Usually stops should be set about $1 below the breakout point. The more expensive the stock, the more leeway you can give it, but never have more than a $2 stop loss. Some people employ a 5% stop loss rule. This may mean selling a stock that just tried to breakout and fails in 20 minutes or 3 hours from the time it just broke out above your purchase price. 4.Sell 20 to 30% of your position as the stock moves up 15 to 20% from its breakout point. 5.Hold your strongest stocks the longest and sell stocks that stop moving up or are acting sl
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