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THE MARKET WHISPERER 40 3

retest, 400 being half the quantity of my partial. The total quantity I now
hold is 600 shares.

Q: Do all stocks execute retests?
A: Of course not. Sometimes you may find that you’ve taken a partial
and the price keeps moving up without returning to its breakout point.

This is a happy occasion where the small quantity leftover after the partial

will bring you greater income than the partial. Enjoy it!
Q: What happens if I bought more at the retest, but the price keeps

dropping?
A: No one can guarantee that you bought at the right point. Statistically,

stocks that begin with a trend up will continue to follow through unless the
market changes direction. Wait patiently for a five-minute reversal, since it
is reasonable to assume that the price will continue trending up. Since you

have already locked in a partial profit, you are currently holding a smaller

quantity of shares even though you have bought more. You can let the price

drop slightly without ending up with a loss. Stay calm and relaxed. In eight

out of ten instances, the price will begin to trend up again. You should be

able to easily allow yourself to absorb two out of ten unsuccessful moves.
Q: How long should you wait for the retest with an open order?
A: Usually no more than five minutes. A quick retest may occur after

several seconds, a slower one might take a few minutes. With a slow retest,

wait with your finger on the mouse and execute your second purchase with

the click of the button. With a slow retest which is taking more than five

minutes, you will need to wait for a clear reversal, since the price may then

drop even lower than the retest point. If the retest executes over more

than a half hour, be very careful: it could be that the stock has decided to

change direction.

• Rule 3: Realize Profits Again!
Did you buy more at the retest? Let the price move up and look for

another partial, which will generally be slightly below the previous peak’s
line of resistance. At this second partial point, you should sell half of the
quantity of shares you are now holding. The goal is to “put behind” you the
risk that buying more shares brings with it as the price moves above its
previous peak.

For example: you bought 1000 shares at $30.01, taking a first partial
with 800 shares at $30.35. The stock retests and you buy 400 more shares,
which is half the amount sold at the partial, for $30.05. Now you have 600