September 26, 2007 at 7:03 am | | Comments 3

Questions and Answers

Here are a few questions I’ve been asked in recent days by other traders which I thought some of you might find to be helpful. I’ve included the questions in bold below, along with my answers….

How would you describe your trading style, other than swing trading?
I am more of a quick-hit (Bandit) type of trader, so I don’t mind booking quick double-digit percentage gains in only a few days. For example, on Monday over at we closed out a nice 15.5% winner in LDK, a stock we held just 4 days after buying it last Wednesday when it broke out at $61.00 from its ascending triangle pattern. The fast gains are my favorite kind, and I’m much more prone to be in and out of trades in a few days than to linger for weeks on end hoping my idea will eventually pan out. I stick with the charts, and I want to be in when there’s momentum and out when there isn’t. In addition to swing trading, I also like to catch some day trades for faster, smaller gains of a couple percent. These plays also come from the charts but typically in stocks which look poised for a temporary move where I can grab an initial breakout (or breakdown if shorting).

I’ve read about the Turtles, do you often catch major turns with your trading?
Quick money is fine with me, in fact I like it better than slow money! It adds up more rapidly and I don’t usually have the patience of a Turtle to stay long or short a stock (or index) for more than 2-3 weeks. I want my money turning over more rapidly, compounding faster.

How do you deal with closing out a solid gain, only to see the stock keep going without you?
It can be tough but that is sometimes just part of trading. I’ve found that when strong trends are present, multiple entries can set up along the way, letting me trade the same stock a few times profitably even if I don’t catch the entire move. I like catching a piece of it but I feel no obligation to participate in a long-term trend. I want to get in, get paid, and get out. That’s what my Bandit style is based on.

I have trouble leaving a nice winner on the table, how do you decide when it’s time to cash out? Any help would be appreciated.
For most of my trades I will set up my entry, stop, and usually 2 targets. Setting two profit targets allows me to book some gains along the way to ring the register while waiting for a potentially larger move to develop. That helps me offset the urge to take a good trade off the table, so partial sales are definitely helpful for allowing you to stay with the stock if even with a smaller position late in the trade. Most traders think they need to be IN or OUT of a trade, but few of them consider the idea of partial sales in order to scale out of a good trade carefully.

Trade well out there today!

Jeff White
President, The Stock Bandit, Inc.
Swing Trading & Day Trading Service

[tags]Stock Market, Day Trading, Stock Trading, Investing, Swing Trading[/tags]

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  1. Where do you place your stops?

  2. Hey David,

    My stops are different for each trade, so there is no set number or percentage stop I apply across the board. I usually try to determine at which point a pattern will have failed, and then set my stop according to that. For faster movers it may be 6%, for slower movers it might be 2%….just all depends on the behavior of the stock.

    Hope that makes sense!


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