Stock Trade Example
Page Three For This Example Trade
This stock trade is now in day 12 of our Traders Action Zone strategy. Wow, has it been that long? Usually with swing trading we are in and out in only a few days. This trade has lasted forever! It’s now Wednesday and ARI is coming out with their earnings on the following Monday. We are not going to stick around for that so we either going to get stopped out or sell it this week. We will be out of this stock soon!
Stock Trade – Day 12
ARI is running into resistance again. This time at $42.00. Big surprise there! This stock ran into resistance at $40.00, $41.00, and now $42.00. I can’t believe that we are still trading this stock. We will just continue to trail our stops under the lows of the candles. Eventually we will get stopped out, won’t we?
Stock Trade – Day 13
You have got to be kidding me. Another breakout! This time the stock has a nice wide range candle, which closes at the top of its intra day range, on huge volume. What should we do? We’ll do what we have always done. We will move our stop under today’s low. There is one problem though. Today is Thursday and this stock is coming out with their earnings on Monday. If we do not get stopped out tomorrow (Friday), then we will have to sell it. We do not want to hang around for an earnings release.
Stock Trade – Day 14
I cannot even believe my eyes! This stock has gapped up on massive volume! It looks like some news has come out early about their earnings. At this point, I could care less why this stock has exploded. It just has. Look at everyone piling into this stock. The crowd always does everything wrong. They buy at the top and sell at the bottom. That is complete insanity folks! But, the only way that the minority can profit from the stock market is if the majority make the same mistakes over and over again.
We dump this stock at the end of the day at $45.26. We bought it at $39.46 so we have a nice $5.80 profit on our shares.
Here is the final chart marked with the day that we bought it (green arrow) and the day that we sold it (red arrow).
So there you have it. This was a stock trade using the TAZ strategy from start to finish. Does it always work out this way? Absolutely not! You will have your share of losses and “break-evens” along the way. Manage your money correctly, maintain your discipline, and stick to the rules and YOU WILL BE A PROFITABLE TRADER.
Believe it.
