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How to Insure Those One-Day Triple-Digit Gains

Tuesday, November 1, 2016 2:25
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How do single-day stock gains of 40%, 50%, 75%, 100%, or even more sound? If you’re anything like me, they sound pretty darn great.

Those kinds of gains happen almost every day, but the mainstream financial media would much rather focus on Facebook’s 0.5% jump forward on some new VR breakthrough, or Alphabet’s top line beat sending the stock up 2%, say.

Don’t get me wrong; those are great single-day gains for large-cap companies – but the real single-day home runs usually come from micro- and small-cap companies – for instance, biotech companies that have just announced exciting news.

The news can include positive trial results, a partnership with a major pharma company, earnings that surprised the Street… Almost anything that catches traders by surprise can spur huge gains.

When these kinds of announcements occur, it’s not uncommon to see shares gap up 50%, 75%, 100%, or more overnight. Those are the kinds of gains that create unimaginable wealth – and very quickly, too.

But, as you can imagine, this story of riches can just as easily become a nightmare if the company releases unfavorable trial results.

When that happens, shares can easily drop 50%, 75%, or more in after-hours trading. Even prudent investors using protective stops will feel the sting because they won’t be able to exit the trade until the market opens… after the damage is already done.

But I’m going to show one simple technique that will leave you free to target as many of those 100% one-day gainers as you can handle – and protect them once you’ve got them in the bag.

Here’s how it works…

Tags: trading strategy

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The post How to Insure Those One-Day Triple-Digit Gains appeared first on Money Morning – We Make Investing Profitable.

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