Recognizing The Momentum

Recognizing The Momentum

Recognizing The Momentum 1024 546 Steven Dux

What happens when your strategy doesn't seem to be working? First, relax.

Shorting is a challenging game.

And with that comes ups and downs like anything else. The key to understanding your strategy is patience and an ability to evolve while maintaining respect towards your risk-reward threshold. Having both a macro and micro view of the overall market will help you navigate to success even when running into short traps in the everyday market.

I want to bring attention to three stocks that will shed light on maintaining strategy. First, we have the stock $HNMY, who last year had back to back green days and soared to $7. However, after its initial surge, we saw the stock fail.

Hypothetically..

If the stock was to be shorted around $6.20, you are not risking the full $7 but the $.80 remaining,

So trying to short on the first red day is a strength not necessarily a weakness. Keep in mind, if the stock doesn’t move the way you want, regain patience even if it keeps going up. I saw $HNMY as it climbed to $9, and because of that, I took a loss. Achieving patience may seem like a daunting task in itself. This is when knowledge helps build the confidence needed to feel secure.

$HNMY was showing a decrease in total volume traded over the next few days, making it look overextended. Taking another resistance level, say at $17, didn’t make sense. With this stock being overextended and limited shares being moved, I knew it was a matter of time before it came down. The goal of any trade is to make a decision today that sets you up for success tomorrow.

Achieving the patience

Achieving patience may seem like a daunting task in itself, but this is when knowledge helps build the confidence needed to feel secure. $HNMY was showing a decrease in total volume traded over the next few days, making it look overextended. Taking another resistance level, say at $17, didn’t make sense.

With this stock being overextended and limited shares being moved, I knew it was a matter of time before it came down. The goal of any trade is to make a decision today that sets you up for success tomorrow.

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