Trading Multiple Entries

Many times we can miss the first opportunity when a stock begins it's price movement, but that shouldn't keep you from looking for the next entry opportunity.

A large portion of trades will make an initial move, consolidate and provide you with a good entry point relative to the initial stop.  Below are 3 examples of positions we own that are giving second chances.

The key when taking secondary breakouts is to have a proper stop loss set.  In all 3 examples the yellow trending line can act as that initial stop.  If you are using a %risk model to determine position size you can perform a quick calculation to know how many shares to purchase.

Let's take TNP and determine our trade size.

General Assumptions 

Portfolio Value = 100,000  Risk%=.50  Current Price 9.60  Initial Stop Loss=8.72

100,000 x .50 =500 (the amount we're willing to lose on this trade).  

9.60-8.72=.88 which is the difference between our entry price and initial stop.  We then take 500/.88 which =568 shares.  568x9.60=5,452.80.  At this level we are going to allocate a little over 5.4% of our capital to this trade.  Even at a 5% trade the size is large enough to have meaningful effect on our total portfolio return if the stock continues to run another 20-50% higher.  We also have the option to increase our risk% even higher, but remember that this is a secondary breakout.



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