"The Anatomy of the Trade"

I know you hear this all the time , " Trade your plan and plan your trade." There really is alot of truth in that. This applies to volatile stocks, low priced stocks, and speculative stocks - which you get alot here from my calls.

Know what timeframe you are buying the stock for! If you don't really like a stock that much for the longer term, please make it a day or swing trade.

The best thing you can do when you are in a profitable position is to sell 1/2 when the stock rises 20% or more. Why is that so important? For one, it allows you to sleep better. I'll give you a recent example: NLST. I recommended NLST at around $9. If you bought it there, you should have sold 1/2 when it got to $11.50, which is like a 25% gain. By selling 1/2 near $11.50, if the stock goes back to $9 you still made money! If the stock goes to $8, you still made money overall! If the stock gets hammered to $6.50, then you break-even overall! You can sleep like a baby at night with your 1/2 position no matter what happens!!!!! Holy cow, do you get it???? Huh? Huh? Another example is HTI. I recommended it $4.75 and it went to nearly $6. You should have sold 1/2 in the high $5's. That way, there is no way you can lose money on the HTI trade unless the stock goes below $3.75! I don't care if you treated HTI as a daytrade or long term trade, you should take 1/2 off on a quick 20% run like that.

(If you purchased NLST at $10 ( a dollar late after the recommendation), you should still consider selling 1/2 because you need to use $9 as your reference point because that's where i called it and it yielded 25% gain from the $9 level. You shouldn't be saying to yourself, "Since i got it at $10, i want to see at least $12 before i sell 1/2." No no no no no!!!! The reason you don't do that is because the rest of us who bought at $9 are gonna dump the stock on you and you wish you took some profits at the 11.50 level!)


Let's rock!