Please Note: Blog posts are not selected, edited or screened by Seeking Alpha editors.

Wait For The Pullback

One valuable piece of advice is not to chase a trade. The temptation is to buy after a large up move or sell after a flush down. This usually leads to losing trades.

My tip today is to make sure you wait for pullbacks before you enter a trade. Pick a level that you are comfortable entering the trade at and plan to enter there.

Stocks never go up for ever, on their way up there are pullbacks that make for good entries, try using a moving average as a point of support for entry. The faster the moving average the smaller the pullback needs to be for entry. For example a stock doesn't have to pull back as far to get to the 8 EMA as it does to get to the 100 EMA.

The smaller the pullback the more chance you have to get in the trade but also you have more of a chance of being stopped out by a deeper pullback. If you wait for a larger pullback price might never make it there, the risk is missing too many good trades.

You need to find a balance between aggressive entries that result in more stop outs and too conservative an entry that leads to many missed trades.

The same is true for short side trades.