Friday, March 16, 2007

ZOLT - One That Got Away

This morning I passed on ZOLT because "ZOLT got away and it looks like it blew it all out in the first burst so I'm going to let that one go."

That was at 10:14

After which ZOLT did a very nice return to 4 where it promptly turned around and went up another 1.80 before it printed a nice exit pattern.

Lesson learned - don't give up on the high jumpers - yes most often they have blown their wad - but every once in awhile they haven't.


Bullish Jim said...

After which bar would you have bought? I'm not clear as to the definition of a bounce off the 4. Thanks.

Marlyn Trades said...

Aggressive off the 6th, conservative off the 10th - a few cents either way.

I'll do a post on this if I can find some examples.

Bullish Jim said...

Thanks. I was actually thinking the really conservative 11th bar until I noticed each unit was 40 cents. Would you stop loss exit based on a bar or bars closing under the 4?

Marlyn Trades said...

For a day trade I'd use a mental stop around 40 cents below the buy point. (30 dollar stock = 30 cents + 10 rule of thumb). If I were going for a longer period then some increment based on the ATR.

Bullish Jim said...

Thanks Marlyn. I'm going to try the "penny per dollar + 10" rule of thumb you describe for my day trades. I clearly need to buy fewer shares at a time because, given the quantities I've been buying for day trades, I can't stomach a loss of any more than 20 cents.


Sometimes its hard.