Probably one of the biggest hurdles most traders are struggling with is their obsession with entry prices. You will often hear people brag about their entry price and how they picked a bottom. You mostly never hear them talk about their overall performance. Let alone the bad trades they made. Throw a few darts – you’ll be lucky every now and then.
My point is: Concentrate on proper execution. Your entry criteria should be dictated by the chart pattern not by the price.
Here is an example to show what I mean. One of the stocks I plan to enter is PCX – Patriot Coal. It is on my public list and I’ve annotated it. What I am looking for is a flag pattern to develop. If we get one – and right now it looks like PCX is indeed starting to build one – I will be watching it very closely. I will watch for clues if my entry rationale is still valid. Is price retreating in orderly fashion? Is volume decreasing during the consolidation?
So what about price? Does it make any difference if I buy at 9.00 or 8.50 or 8.00? You guessed it. I couldn’t care less. If the pressure is there and the stock is acting right I want to buy. If my timing is right I will make money. My entry price won’t matter.
Timing is more important than price!
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