Last week I told you that I am not perfect and I will freely admit when I am wrong, but I also told you that the road is paved both ways and I will tell you when I am right. Even though I have a 2 percent goal per week, there are times when the stock is climbing, and you can ride the wave, so your gains are even greater. Let’s keep the math simple. Let’s say you buy a stock for $100. Your goal is $102. Assume the stock closed at $102.50. Your goal has been met. But how do you ensure you don’t go below your goal but still take advantage of a rising wave?
The answer is simple. You use stop loss orders and revise the number daily as the stock climbs. If the stock closes at $102.50, you put in a stop loss order of $102. If the stock goes below $102.01, your stop loss order is triggered automatically to sell at $102 and realize your 2% goal. But let’s assume the intra day low of the stock only went down to $102.50. Your stop loss order did not get filled. That’s great, your gains are greater. You revise your stop loss to one penny below the intra day low. It’s revised to $102.49. Let’s say the stock is climbing and the intra day low if $102.75. Again, your stop loss order did not get filled and you revise it again to $102.74. You continue this process daily to ride the way. It’s not a matter of if, but when the stock will have a down day, and your stop loss order will get triggered and you get out to move on to the next one.
Now for some gloating. My biggest gain for the year was this past month. By using my strategy, I would have bought Broadcom Inc (AVGO) on June 11 at 143.82. My 2% goal was reached the next day but by using stop losses and revising the order daily, I rode the wave, and a stop loss would have been triggered June 20 at 178.49 for a 24% gain. A 24l% gain in a week and a half!!! While that sounds amazing let’s have a reality check. That is not the norm, but it is a real-world example how to use stop losses to ride the wave to maximize gains. From July 1, 2023 to June 30, 2024, I forecasted 22 picks that earned more than 5% in a week and 9 of those earned more than 10% in less than two weeks. Go to twopercentgoal.com and sign up for the free 30-day trial. I’ll send you my test data that you can see for yourself.
Cheers,
Al
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