Reasons2 sell webinar


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For the February 7th installment of our Webinar series, The PlayBook with Mike Bellafiore, Mike discussed Reasons2Sell: Getting The Most Out of Your Trades. If you missed this presentation go to

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Reasons2 sell webinar

  1. 1. Reason2SellGetting The Most Out Of Your TradesMike Bellafiore
  2. 2. Pre-order at Amazon
  3. 3. Regret• I sold too early
  4. 4. Move2Move or Trade2Hold?• Determine what the trade is• Then judge whether you sold too early
  5. 5. Develop Exit Rules• You determine your exit rules• From Your PlayBook• If you don’t then don’t complain
  6. 6. No Regret• If you follow your rules then the move after is of no matter• If the stock trades higher, so what?• Your job is to do the right thing!• It’s not to take every penny from a move
  7. 7. One Good Exit Strategy
  8. 8. Most Common Reasons2SellHits your price targetIntraday uptrend brokenBreaking news in the stockMarket is at important technical resistanceBreakings news in the marketUnusual seller on the tape
  9. 9. Most Common Reasons2Sell Clear buying pattern dissipates Time clock goes off in your trading brain Too steep Too much of a Pullback Trading day ends  8/13/12
  10. 10. 1. Hits Your TargetHave a target or set of targets before you enter a tradeFollow your plan and hit out when your target(s) are reached
  11. 11. Consolidation at the 43.00 level provides short entry with a 41.50 price targetPrices reaches 41.50 target,then pulls back into the Close
  12. 12. 2. Intraday Uptrend BrokenZoom out to the 5 minute or 15 minute chart after 10AMIfa series of higher lows is broken, hit out
  13. 13. ...after sharp down move, it fails to make a new low, providing a clear signal that the downtrend has endedGNC begins cleardowntrend off the Open,and short opportunity isprovided when a 38.45buyer drops...
  14. 14. 3. Breaking News In The StockIfunexpected news suddenly comes out, hit out and re-evaluateItcould mean a huge fundamental change in the company
  15. 15. ...however, after breaking down through range, JCPA held offer appears at CEO announces better than22.00 in JCP, providing a expected store sales for May,short entry opportunity... leading to a quick reversal
  16. 16. 4. Market Is At ResistanceMost stocks follow the overall marketIfthe stock and the market are both nearing big resistance, higher probability of a reversal
  17. 17. SPY reaches technicalresistance area that ithas failed to hold abovefor the past severaldays...
  18. 18. Simultaneously, BACreaches 7.70 resistancearea… …but sells off when the market fails at resistance
  19. 19. 5. Breaking News In The MarketIf a big event occurs and causes the market to move erratically, hit out and re-evaluateCan be an economic number, Supreme Court decision, terrorist attack, etc.
  20. 20. 14:00, FOMC announcement is released, and the statement is bearish for stocks, leading to an immediate selloff into into the CloseOn 8/1, CAT begins to form uptrend after11:00, providing an opportunity to getlong...
  21. 21. 6. Unusual SellerIfthe stock tries to get above a price several times and fails, hit outIfyou notice a lot of selling at a level and the seller steps lower, hit out
  22. 22. ...unusual seller appears at 69.50, a signal that longs should exit their position and re-evaluateFOSL begins clear uptrend in themorning, with several opportunitiesto get long...
  23. 23. 7. Buying Pattern DissipatesIfa stock is showing a distinct buying pattern, but it disappears, hit outThis can be a set of consistent pullbacks, a set of consolidation flags, etc.
  24. 24. ...once the buyer disappeared above 50.25, the buying pattern was clearly gone, and the stockAfter ranging off the Open, a pulled back to themassive buyer appeared on the original pricetape at 49.54, driving the priceof the stock up over .70c veryquickly...
  25. 25. 8. Time ClockIfafter a specified amount of time the stock hasn’t done what you expected, hit outWait for the stock to give you more information before getting back in
  26. 26. Seller appeared above 21.00, offering excellent short opportunity…FMCN was strongoff the open due tostrong earningsnews from otherChinese stocks… …however, was not able to move away from the price and stayed there for several hours – a signal to exit the position and re-evaluate
  27. 27. 9. Too SteepIf a stock goes down or up too far and too fast, it will likely bounce right backTake some off into the move and look for a place to re-enter
  28. 28. ...however, a move of over 1 point in 30 minutes is quite steep for this stock, a signal that a pullback is likely to follow...CVS drove higher off theOpen the day after beingsold off on earnings...
  29. 29. Too much of a Pullback 8/13/12
  30. 30. The Principles of Elite Performance• Add nuance to your rules• You are not good at exits YET• Practice, rehearse, think, talk about them• Training, coaching, and mentoring• Purposeful practice!
  31. 31. Contact•• @mikebellafiore