Buy and StopLoss
Hi Marty,
I am new to the community and very glad I found it.
Searched through questions but didn't find clear answer, so basic questions.
Buy price points are recommendations where the security can be bought?
and will there be recommendation to sell ?
Is there a stop loss recommendation?
Welcome to the community!
Yes! A buy point is an area where a stock may be bought. I use a 5% stop-loss rule upon entry as I do not want to lose more than 5% on any trade. However, if you stock starts to advance then raising your stop-loss may guarantee you a winning trade.
Typically, when swing trading I take profits at 10%. However, it the markets are behaving as they are now we can leave trades on longer for larger gains. Most growth stocks advance 20%-25% before forming a base, and holding on longer is asking for trouble.
Take ALGM for example. The stock broke out of a base from a proper buy point near the $34.14 level. It has run up more than 20%, and now would be a good time to take at least partial profits. If hanging on in hopes of more gains then a proper stop loss would be the low from last Thursday at $38.70.Regards,
Marty