Here’s What To Do When A Stock Gaps Down Below Your Stop
Boxing great Mike Tyson famously said “everybody has a plan until they get punched in the mouth”. For traders, the dreaded gap down after you’ve entered a position is the equivalent to getting punched in the face.
This is the spot where trading plans go out the window and poor decision making sets in. A trader might freeze up and not know what to do, compounding losses, or do the opposite and start overtrading.
For example, let’s say you enter XYZ stock at $100 with a stop at $95 at 1% risk. The next morning an analyst downgrades the stock. It opens at $85 and we are not looking at a loss of 3%.
Often traders panic and just sell out at this time. This is a mistake because this is often the worst time to exit. That’s because big gap downs are often the result of panic selling and soon a reflex bounce is in play.
In today’s video, I’ll show you how to trade when your stop has been blow up using the “stop gap down” strategy. Here is what you will learn:
- How to handle gap downs using our recent Goldman Sacs trade (we got out 1o points higher than the open)
- How to understand your own risk levels
- How to analyze supports
- How not to panic sell
- How to improve on your risk
- How to set a “max pain” loss.
Stop Gap Down Strategy https://t.co/8Kxe9cSPvh
— Paul J. Singh (@PaulJSingh) March 16, 2020
The post Here’s What To Do When A Stock Gaps Down Below Your Stop appeared first on Bulls on Wall Street.
Source: https://bullsonwallstreet.com/heres-what-to-do-when-a-stock-gaps-down-below-your-stop/?utm_source=rss&utm_medium=rss&utm_campaign=heres-what-to-do-when-a-stock-gaps-down-below-your-stop
Anyone can join.
Anyone can contribute.
Anyone can become informed about their world.
"United We Stand" Click Here To Create Your Personal Citizen Journalist Account Today, Be Sure To Invite Your Friends.
Please Help Support BeforeitsNews by trying our Natural Health Products below!
Order by Phone at 888-809-8385 or online at https://mitocopper.com M - F 9am to 5pm EST
Order by Phone at 866-388-7003 or online at https://www.herbanomic.com M - F 9am to 5pm EST
Order by Phone at 866-388-7003 or online at https://www.herbanomics.com M - F 9am to 5pm EST
Humic & Fulvic Trace Minerals Complex - Nature's most important supplement! Vivid Dreams again!
HNEX HydroNano EXtracellular Water - Improve immune system health and reduce inflammation.
Ultimate Clinical Potency Curcumin - Natural pain relief, reduce inflammation and so much more.
MitoCopper - Bioavailable Copper destroys pathogens and gives you more energy. (See Blood Video)
Oxy Powder - Natural Colon Cleanser! Cleans out toxic buildup with oxygen!
Nascent Iodine - Promotes detoxification, mental focus and thyroid health.
Smart Meter Cover - Reduces Smart Meter radiation by 96%! (See Video).