Tuesday, May 21, 2013

How To Take Profits From Suddenly Rising Stock Prices

Every stock trader has vivid dreams about their stocks exploding higher.
You have to.
I think it's a rule!
Are you just dreaming about it?
Or, do you have a plan to take advantage of sudden price spikes?
Successful stock traders have strategic plans in place to take advantage of sudden upward price spikes. It's not rocket science. It's simply a method of placing the right type of order to sell.
The "Trailing Stop-on Quote" Sell Order is unique in that it enables you to "ride" suddenly rising stock prices higher and the Sell Order executes when the price stops rising and reverses lower.
Let's say that you own shares in a highly volatile penny-stock company.
You might have acquired your gives you because volatility may result in substantial gets very quickly.

You purchased the penny-stock organization gives you in several cents every single, so that your $500 purchase got people 10, 000 gives you.

Because you verify the share on a daily basis, you'll see your press release asserting an important engineering discovery with this very little new venture organization.

Anticipating a rise in prices as the news spreads, you place a Trailing Stop-on-Quote Sell Order that will sell 5000 of your shares whenever the share price falls 10%.
What this means is that as long as the share price continues to rise, there will be no sale.
When it stops rising and falls 10%, a market Sell Order is executed and 50% of your position is sold near the top of the upward spike in price.
By selling only 50% of your position, you are allowing for the possibility that the stock's share price will hold at the higher-level and perhaps continue gaining in price.
You are straddling the fence.
If the upward spike in price is temporary, you will profit from selling 50% of your shares at the high price and have cash on hand to buy them back again when the price comes back down.
Then, you could either repurchase more shares than you sold, or you could buy back the same 5000 shares you sold and pocket some profits.
This is a common strategy for taking advantage of the volatility provided by high-risk, high-reward, penny-stocks.
I'm not a "penny-stock player," however, I do not ignore promising new companies simply because their share price is less than one dollar.
Here's a link to a story that will elaborate further on this trading strategy.
http://newdaywealthprotection.com/how-to-take-your-profits-from-suddenly-rising-stock-prices-p282-147.htm
Timothy Randolph Fletcher is the Managing Editor of the NDW TREND TRADING REPORT. It is a monthly publication that provides research, analysis, and specific stock choices for traders. The company also provides a QUICK-START GUIDE TO STOCK TRADING for those who are considering stock trading for profits. Click here for a free copy! http://newdaywealthprotection.com/index165.htm

Article Source: http://EzineArticles.com/7720577

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