{"id":10646,"date":"2011-04-01T11:10:12","date_gmt":"2011-04-01T15:10:12","guid":{"rendered":"http:\/\/www.smbtraining.com\/blog\/?p=10646"},"modified":"2021-05-06T15:43:35","modified_gmt":"2021-05-06T19:43:35","slug":"knowing-when-a-stock-should-move-can-be-more-important-than-picking-its-direction","status":"publish","type":"post","link":"https:\/\/www.smbtraining.com\/blog\/knowing-when-a-stock-should-move-can-be-more-important-than-picking-its-direction","title":{"rendered":"Knowing when a stock should move can be more important than picking its direction"},"content":{"rendered":"

Most traders make a whole lot about picking the direction of a stock. \u00a0A very important skill talked little about is knowing when a stock should move.\u00a0 After you see something of the Tape you know the stock is now likely to move. \u00a0We saw that a few times in PCX. \u00a0Sometimes this skill is more important than actually picking the direction of a stock.<\/p>\n

26.50 was the level we were watching from past trading in PCX. \u00a0Above this level and we wanted to buy some PCX. \u00a0So most traders obsess about whether PCX will trade above or below 26.50 today right? \u00a0But does that matter as much as you think? \u00a0Trading is about controlling your risk\/reward. \u00a0If we can find spots where the stock should move off of, then determining the direction of the stock is less important. \u00a0Now we will have spots where if we are right our upside is outstanding and if we are wrong our downside is controlled and minimal. \u00a0This is the essence of trading.<\/p>\n

Today we had two instances in PCX. \u00a0PCX got above 26.50 and then impressively took out a decent size offer at 26.52. \u00a0Right after clearing this offer PCX did not go down. \u00a0Above the 26.50 level, strength on the tape, now not trading below 26.50 and ready to move was important trading knowledge. \u00a0PCX traded to its highest intraday price right after the above.<\/p>\n

PCX then pulled back to 26.55. \u00a0It was still early where\u00a0volatile\u00a0moves occur. \u00a026.55 was buying more than at any other time. \u00a0We were above our important 26.50 level. \u00a0We weren’t sure whether PCX would hold and then make a new high. \u00a0But we knew that this was an important moment. \u00a0If PCX was going to work today on the Open it would probably work right now with 55c never dropping. \u00a0This is important trading knowledge.<\/p>\n

Think about it. \u00a0If we wanted to get big then this was our moment. \u00a0Our downside was 1-6c depending on your stop. \u00a0 And our upside was a morning of new highs. \u00a0This was a position of strength because we found the moment, the catalyst, that PCX ought to move off of.<\/p>\n

So for your trading give this some thought. \u00a0What are the catalysts, the moments, that you spot to control your risk\/reward?<\/p>\n

Mike Bellafiore<\/p>\n

Author, One Good Trade<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Most traders make a whole lot about picking the direction of a stock. \u00a0A very important skill talked little about is knowing when a stock should move.\u00a0 After you see something of the Tape you know the stock is now likely to move. \u00a0We saw that a few times in PCX. \u00a0Sometimes this skill is more important than actually picking … Read More<\/a><\/p>\n","protected":false},"author":144,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[10],"tags":[162,30,81,1193,653,1354,1349],"class_list":["post-10646","post","type-post","status-publish","format-standard","hentry","category-mike-bellafiore-bellas-blogs","tag-day-trading-blog","tag-prop-trading","tag-smb-training","tag-trader-education","tag-trader-training","tag-trading-coach","tag-trading-mentor","no-post-thumbnail"],"yoast_head":"\nKnowing when a stock should move can be more important than picking its direction | SMB Training<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.smbtraining.com\/blog\/knowing-when-a-stock-should-move-can-be-more-important-than-picking-its-direction\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Knowing when a stock should move can be more important than picking its direction | SMB Training\" \/>\n<meta property=\"og:description\" content=\"Most traders make a whole lot about picking the direction of a stock. \u00a0A very important skill talked little about is knowing when a stock should move.\u00a0 After you see something of the Tape you know the stock is now likely to move. \u00a0We saw that a few times in PCX. \u00a0Sometimes this skill is more important than actually picking ... 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