Monday, July 27, 2009

Cancelled Buy Stop Orders for SOHU

SOHU is moving down today, and I have cancelled the buy stop orders I had placed on it. So for those who have studied IBD breakout type buys, using those buy stop orders will generally keep you out of failed bases, but will fill your order on the breakouts. Then after there is a breakout, it is important to see whether it occurred on heavy volume, and whether the breakout point holds as support on any pullback.

The best breakouts will either move up and not come back to the breakout price, OR they will move up a bit (say 10%) and then come back down to the breakout point but close above it on a weekly basis. IF there is a close back below the breakout point after buying a breakout, my opinion is that it is best to just cut the loss right there, and not wait to get stopped out if you weren't already.

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