I know I did!
With great watches such as NUE, R, and CAT, I was able to have one of those memorable trading days. But I am sure not everybody profited greatly of the bounce. If you didn’t, then did you miss the last bounce? Was it something that you could control? Did you try to figure out how to not miss out on it again? I am pretty convinced that the market may have days like these sprinkled in with a lot of terrible days for a while now. So it may be in your best interest to try and capitalize on these opportunities.
Before this year I was normally a “month trader” as I like to call it. I would hold position for a month or two and then make some changes. It worked wonders for a while; however, through this current market I just don’t have the patients to wait it out. So if you have the ability of taking on some risks, then here are some things I do to make sure I don’t miss these great bounces in the stock market.
1. Stay Prepared
Depending on what your method is, you should be keen on actively keeping a close eye on your watch list. One mis-perception that people often consider is that they need to totally come up with a new plan. That is not the case. Keep watching what you think will work well within your system and what the current market allows, and set a detailed plan of what you plan to do, such as: buy target, price target, and exit strategy. Generate a list of stocks that you will actively check every day. If there are some down days still pay attention to the stocks. A true winner will show you some green eventually.
2. Get Your Orders Ready
One thing I like to do is set up stop market orders, or orders that will take action once the stock hits a certain price (Activation Price). The price will usually be the buy target that I have set up. What I like about this, is that you are not necessarily dependent on what the stock market will do. If the market comes out in the red, and everything is going downhill, then you don’t need to worry about your order going through. I’d rather make no money, then lose it.
If an order doesn’t go through on the day, then keep re-evaluating your stocks and reset buy stop market orders. These orders have worked wonders for me, and saved me tons of money. Great stocks like CAT and NUE have made me a bundle during the past weeks.
If you want more control, you can even use stop limit orders. This is where you set the price you are will to execute at.
3. Take Your Profit and Run
Don’t get too greedy. Although you should already have your exit strategy in place, unless you are willing to hold on to the stock for a long time, take what you can get and get out of it because you never know what the next day will bring or even after hours.
Remember…
It is a great practice to try and learn from your mistakes so you can prevent them from happening. So if you keep missing great trading opportunities, then figure out what flaws are in your system. By following these simple steps, I am able to prosper during these volatile times in the market, so far…