You can't chase those kinds of moves and risk buying at the top ... Especially when a stock starts halting.
So what can you do when a stock goes through your entry and spikes without you in it?
You reassess.
Consider how far the stock has gone past your entry.
Was it a big move and now it's over? Or is there potential for more upside using a new entry and trade plan?
With a stock like BAER that spiked so high so fast and started halting, you wait for it to calm down. Wait for the afternoon and come back and see if it survived.
If you're looking at a stock that blew through your entry by only 20 to 50 cents, you can give it time and see what happens…
With Timber Pharmaceuticals, Inc. (AMEX: TMBR) maybe you had a plan to buy the break above $3 but missed your entry because it moved so fast.
If you chased, you were probably caught buying near the top.
But in the moment you don't know what a stock will do ... you feel like you're going to miss something. So here's what you do…
Sit back and give the stock time to play out.
Reassess and react to the price action and make a new plan. That's how you can give yourself an edge.
In the case of TMBR, it topped out right near the Oracle resistance level. So your new plan might've included waiting for the stock to break the $3.28 high after its spike through $3.
Ideally the stock would have consolidated around the high and the Oracle level for a while, and then broke above the high for more potential upside. You could've used the low of that hypothetical consolidation as your new risk level.
If you have a plan and can stick to it, you give yourself better odds of success over time than if you start chasing stocks.
Trading's all about constantly adapting to what the market, charts, and indicators are showing you.
Stay in tune with what's happening in the markets with my Market Update videos. And be flexible and adaptable to what it's showing you.
Have a great day everyone. See you back here tomorrow.
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