Replies to post #2948 on lowtrade

[lowtrade]

multivalue

No each entry is 1/4 of total cash wanted to trade on total play.

Say I want to trade $4,000 I would enter in 4 buys. $1,000 each. and each entry is treated like a complete trade, independent from the others.

What your looking at is a total play divided into 4 separate entries, $1,000 each, based on % of price from previous entry.

So right now the position would involve $2,000 on 2 entries, one at $1.00 & one at $1.05. They will be sold at 25% profit targets or 12.5% loss targets from entry.

The thing to keep in mind is this from of swing trade is designed to allow increasing position size, if stock price increases, hedge if it lowers, and move out without total $4,000 played, if it's a loosing play. So If your swing trade goes as expected, you will eventually make 25% on 4 separate trades. But if your wrong and thing start to go south, you won't loss 12.5% of the total $4,000, but exit before closing new entries.

Some swing traders buy $4,000 at $1.00 and if it goes up 25% sell or down 12.5% sell. My way, I would not loose 12.5% on $4,000 ever. But would recieve 25% of $4,000 if the stock continued winning. Because first buys would start selling out at loss figures, before total $4k was bought. And more buys would come if PPs continued up.

Capital presevation. The turning point of most swings, this way is the 2nd & 3rd buy/sell ratio. As you can see from this play already, the second buy at $1.05 would be sold at .92 loss and 3rd buy, if made during negative direction, would hedge for a fake fall, by buying at .94 just before loosing the 2nd buy play, at .92.