Page 411 - THE MARKET WHISPERER

THE MARKET WHISPERER 40 7

Every day, raise your stop on the quantity left. Raise it to a point about 2
to 3 cents below the previous day’s lowest price, on condition that the low
is still higher than your entry point. In other words, you absolutely must
not lose on the remaining quantity of shares you are holding if you can
help it. On every additional day that passes, you need to raise your stop to
the lowest point of the previous day. When that lowest point breaks, you
will be out of the stock. The only risk is that the stock gaps down on news.

Swing with PAR

Do you remember PAR from the previous chapter?
Take note of the daily chart for several days after the entry [1] at $10. I
left a small quantity of shares over for a swing. Three days after the original
entry, the price had already reached $11 [2]. Notice that on the second day
of trade the stock rested, not going down to the entry point, and not going

up to any new high. This continued into the third day. As we have learned,

in such situations, the stop order for the remaining quantity is a slightly
lower than the previous day’s low. On the third day, the price had not yet
awoken, but to my joy nor did it drop below yesterday’s low. The first three

days formed the bull flag formation.
On the fourth day, the price broke out of the bull flag and provided a

handsome yield for the rest of the swing. The stop can now be raised to the

fourth day’s low, and so on.