Back to Top

Right entry reduces your risk

Posted on 9/04/2014

Always buy a stock on first day of swing move. Or before swing move. If you are swing trader do what works in swing trading. If you buy MDSO today ask yourself what were you doing at right low risk entry points. May be you were busy loading your nudes to Apple cloud.

Swing trader buy stocks after a period of weakness as it starts new swing . Some buy in anticipation. But key is to buy as early as possible in a swing move. Where was the low risk entry in GOOG. If you buy it today and call yourself swing trader, may be your definition of swing needs re examination. 

Buy near swing start and sell near swing end. That is the essence of swing trading. And do it hundreds of times in a year. But if you buy at wrong place , it is unlikely you will survive to make those many trades.

If you are buying a stock on 3rd or 5th day of swing you are starting with low probability entry.Those who have trouble deciding which day of swing is this , should practice and identify at least 500 swing start days before attempting to trade momentum bursts.

As one of the stockbee member put it "Mathematically it makes sense as the better your entry:

1) Easier to withstand a shakeout (which usually and always occurs) 2) Lower risk (Stops relatively closer) 3) Higher reward if Momentum continues + can risk more with stops being closer

In a universe of 10,000 things to buy question becomes do we have patience and discipline to wait and take only the best setups. There is no shortage of setups so why enter on the 3rd or 5th day of the move?"

That is such a basic skill to develop but time and again beginners or some veterans also can not overcome the temptation to buy later in swing.

Buy a swing trade preceded by some weakness in last 4 to 5 days or flat action. If a stock is already up ask yourself , what were you doing on first day of start of move ?

If you want to make money trading do the right thing.

Methods and philosophy


Drew Robbins said...

Do you buy at a certain time of day? If so, do you use an intraday chart to time your entry?

Pradeep Bonde said...

I buy as and when my stock meets my scan condition. I do not use intraday charts for that.

Drew Robbins said...

Thanks for the reply. I've found sometimes earlier in the day a stock will show up on my screener, then by the end of the day it might not show on the screener any more.

SmartFox said...

Hi ,
I really like your site, since it is full of useful information which can be easily understood and followed.
In your image about GOOG above however I seem not to fully understand, why you are pointing out an entry point at the given location. Accordinig to your Setup logic , you say there should not be too many Breakdown days before and in this case, GOOG suffered from many of the breakdowns upfront to your dedicated buy point.
Could you explain , why this is still a possible entry point in your opinion!

Thx so much!

Pradeep Bonde said...

Those are not 4% breakdowns. That chart template is $ b/o template.

DMertch said...

Like Drew said, sometimes that 4% breakout will fade away throughout the day or maybe pullback and then go back up. Do you just buy as soon as it reaches 4% if it meets your criteria?

Pradeep Bonde said...


DMertch said...

Do you scale in trades or wait to see if the stock will have a strong close on the breakout day?

Pradeep Bonde said...

I put in full position. No waiting till end of the day

DMertch said...

Thanks for your help!

Bee said...

The volume didn't seem to be higher when you bought GOOG on August 29th, and when you bought YYY in August as well. Why did you buy them when they didn't meet your scan criteria? Thanks for all the content by the way.

Pradeep Bonde said...

Show me a study that shows high volume is required for breakouts to work. My $b/o scan does not have high volume condition.

MN said...

Pradeep Bhai,
Awesome content.. thanks

What is the criteria for RBB or RBD.. is it same as the 4% range C/C1 > 1.04 AND V> V1 and V > 100000 ... but in those charts for GOOG and YYY V is less than the previous day..