Buying at higher levels.......

I forgotten ………

In intra-day....when buying near low, our stop is too small and we don’t care if it broken……or some-time we turn the trade short after breaking the stop, but when we buy at higher levels………we use a comparitively broad stop....so that it can flucate....but .......

We normally face 3 phases when we buy at higher levels :

1. We bought the stock…….and as expected…..it kept continue rising.
2. We bought the stock…..it moved little higher ….and came down before we close.
3. Just after buying it started sliding.

Well…..did we considered……..?

1. What is the average range of the stock in last few days……? If it has already reached to it’s range……there is a less possibility that it will further move higher.

2. It has broken it’s day’s high……but could it break previous day’s high……? If it has broken both……it is a good candidate to buy……, if broken days high but failed to break previous day’s high……better to short with a stop of previous day’s high.