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  • How To Handle Gaps Down 0 comments
    Sep 22, 2011 2:43 PM | about stocks: FOSL, CMG
    IF you are looking to short here, we really don't have a problem with it but try to use strength to do so as you missed the big gap down already (And use trade size risk management). Doesn't mean it can't keep going lower I  just mean that your most opportune time was BEFORE we fell. Keep in mind that you are shorting AFTER a gap.
    And that is the issue these days on both sides of the market. Stay tuned as we've been doing a lot of thinking about how to be able to effectively trade these gaps. For example look at the open.  
    Suffice it to say the last thing you wanted to do this morning is to short AFTER this morning's gap as you missed a big move already BUT THAT IS WHAT REACTIONARY TYPES DO!  It's really the same thing as going long AFTER a market just gapped up 300 points. Case in point let's look at today's opening on CMG
    So what's the moral of the short term story here?  Always let the dust settle from the open. 

    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: FOSL, CMG
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