Seeking Alpha

All About Trends'  Instablog

All About Trends
Send Message
All About Trends is a subscription based newsletter service focused on helping individuals secure consistent profits in the market by trading what they see, not what they think, hear or fear. "Like us" on Facebook at www.facebook.com/AllAboutTrends.net and receive our free report --... More
My company:
All About Trends
My blog:
All About Trends
  • How To Handle A Down Day In The Market 0 comments
    May 24, 2011 2:51 PM | about stocks: IRBT

    On Monday, the markets gapped down and stayed down most of the day.

     
     

    At first glance seeing as how we broke the blue support zone should we freak out and sell sell sell? Should we jump to a conclusion immediately?  

    Well before we answer that question let’s back up a moment and shift to what we do when we see markets getting hammered in pre-market (remember gaps are  events over which you have no control over anyway as you never know when they are coming).
     
    When we see markets are going to open down the first thing we do is WE DON’T REACT! The second thing we do is we let the opening nervousness settle down and THEN we look at our current holdings to see exactly what they are doing/showing technically speaking.  This is what we mean when we say “Let Your Stocks Tell You What To Do By The Action They Are Exhibiting” 
     
    We look at technical supports, we look at how much we are down on the position on its own, but never really need to freak out because of trade size risk management.  So you see, as always trade size risk management saves you ALL the time and allows you to never have to concern yourself with “am I getting hammered?” More often than not a bad day for you  is that of a little spilled coffee on yourself.  
     
    Case in point a good example of why we don’t want to jump to conclusions immediately is that of IRBT. Last week this issue broke its uptrend and at one point we were underwater to the tune of about 8% on the position on its own.
    Monday this issue rallied right back up to the 50-day and here we are at break even again.  This is exactly why we don’t jump to conclusions. Had we jumped to a conclusion on the break down? We’d have taken a loss, now?  Breakeven to slightly ahead.  It doesn’t happen all the time but more often than not for us it has.  The phrase that comes to mind is “it’s more of an art than it is a science”.
     
     
    To learn more, sign up for our free newsletter and receive our free report — “How To Outperform 90% Of Wall Street With Just $500 A Week.”
    Stocks: IRBT
Back To All About Trends' Instablog HomePage »

Instablogs are blogs which are instantly set up and networked within the Seeking Alpha community. Instablog posts are not selected, edited or screened by Seeking Alpha editors, in contrast to contributors' articles.

Comments (0)
Track new comments
Be the first to comment
Full index of posts »
Latest Followers

StockTalks

More »
Posts by Themes
Instablogs are Seeking Alpha's free blogging platform customized for finance, with instant set up and exposure to millions of readers interested in the financial markets. Publish your own instablog in minutes.