How do you get the Ctabs "buy" target price?
There are too many possible combinations to cover exhaustively, so general scenarios will be discussed in the context of a long position.
For the Ctabs action commentary "Next trading day, buy if stock closes above $25 with an up candle.", you have to look for an opportunity to buy the stock at $25 but only if the stock closes above $25 with an up candle. Buying at a price lower than $25 is more optimal; buying at a price higher than $25 is less optimal.
A relatively safe and easy way is to wait towards the end of the trading day before committing a buy. Towards the end of the trading day, the day's high and low points are likely to be set without further change and an up candle formation should be apparent if indeed the stock is going to close with an up candle. However, the stock price may be far above $25 in which case the buy at the higher price is still valid to satisfy the "buy" action but at a less optimal price point. That is the trade off - safer buy action at a less optimal price point. This is consistent with risk-reward in stock trading decisions. If the price point is too high for your risk-reward ratio, you may elect to pass up on the buy opportunity altogether. Between a lost opportunity versus the risk of a potentially higher real loss, the former may be more acceptable to you.
More you might like
Stock Market Day Trading Experiences
This article covers day trading experiences examining what works and what doesn’t work. Many similarities exist between day-trading and short-term inter-day trading.
Paper Trading versus Real Trading
This article compares paper trading with trading involving real money. Failure in paper trading is a sign that the person should not partake in real trading. Success in paper trading does not necessarily mean a person will succeed in real trading.
Impact of Personality Influences on Stock Trading
This article examines the impact of personality influences on stock trading activities and what can be done to control such influences on stock trading.
Stock Market Pulse and Sentiment Q1/2009
This article takes a snapshot view of the stock market pulse and sentiment as a heads-up for stock market outlook.
A Trend Following Method to Guide Your Stock Trading Buy/Sell Decisions
This article examines the elements of successful stock trading. A stock trading method to execute winning trades and to achieve trading success. A trend following system based on candlestick technical analysis.
