One or two members unfortunately missed the fast move up by Heritage Oil (hoil) the other day and so were then stopped out (at evens, thankfully) when it fell back just as quickly again. Similarly with our suggestion to take profits on Talvivaara (talv) last week.
We have been asked if it sensible to enter a ‘Limit’ order at the level of our target price. Our answer is to say ‘Yes’ it is. Our reason for suggesting this is that whilst the market is in course of a trend change and before a more defined trend sets in share prices are more volatile and susceptible to fast counter moves (a la Heritage oil). This means that it is not so sensible for us to use our normal ’steady-trend’ basis of waiting for the share to ’stop itself out’.
In this more volatile market scene that is a luxury that we cannot afford; it is, therefore, much more sensible, if not necessary in volatile markets, to take profits quickly and to be grateful for them.
Our suggestion then is that at the same time you enter your trade and your stop order (never, ever, forget to put in your stop!) you might also put in a Limit order to close your trade at our suggested target price. We leave you to decide if that should be the lower or higher where we provide two target figures.
IT IS VERY IMPORTANT that when entering both your Stop and Limit prices orders you make them ‘OCO’ (‘One Cancels the Other’). Please DO NOT FAIL to do this as, otherwise, you may find that your remaining order (either the Stop or the Limit, whichever has not been traded) might continue in force and be traded later when you will suddenly find that you have an open trade that you have no recollection of making!
We will revert to our normal procedure of mainly closing on Stop-outs when the markets have returned to a more stable trend basis
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