TM editors’ note: This article discusses a penny stock and/or microcap. Such stocks are easily manipulated; do your own careful due diligence.
Illustrating a trade I initiated on Monday March 28th, the trade is based on the study of price patterns. The risk and return are defined, and the duration I am targeting is 6-8 weeks. At initiation the stop loss is .60, I leave a buffer of .03 which I attribute to possible intra-day noise. I will read just the stop loss weekly to coincide with the rising trend line.
Daily moving averages are also converging, and should provide support. The chart is looking bullish. Most importantly risk and return are defined. Looking to exit the trade at 1.05. My maximum return is 50% and maximum loss is 10%. That’s five units of return for one units of risk.
Happy trading.
