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Re: pasqualee post# 43184

Saturday, 08/30/2014 12:35:36 AM

Saturday, August 30, 2014 12:35:36 AM

Post# of 47295
Fakeout protection is a gut feeling. But most of the time I look at the average daily price swings and place my buy that far above breakout. This doesn't always work because resistance break can be emotional, even on the big boards. So no matter what you do, there's always a chance it pops, closes your buy stop and retraces the next day.

Other times there is something in the TA or chart that gives me confidence and I buy right at resistance. Like a nice steady slow climb with increasing volume. That says the move is worked at/ calm, and steady calm retail sentiment is comforting it will continue.

Another aid is to check the short interest. if it's close to or above 10%, there are good odds any breakout will be met with a short fight, causing retrace back to resistance.

50% gut and 50% experience is used to protect from fake breakouts. But the main thing to remember is don't let a fakeout fall to far before exiting. As you are learning, one can always re-entry on continuation. But you can't get back what's lost if it doesn't. Trade fees are usually worth the protection.

Welcome to my mind!


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