Frequently Asked Questions
Pocket Pivot Review / Buyable Gap Ups
If you buy a stock on a gap up day and the low of the day is greater than 7-8% from where you bought it, do you still set your stop at the gap up day's low?
If your maximum risk is 7-8%, then you adhere to that rule first, and perhaps not buy that gap up because it is beyond your risk level. Alternatively, you could also create a rule that allows you to increase your maximum risk to 9-10% in such unusual cases if the stock gapping up is clearly a fundamentally and technically strong leader.
Published: Oct 21 2010