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[Platinum Watchlist] (3.2.23) 3 Stocks on the list!

[Platinum Watchlist] (3.2.23) 3 Stocks on the list!
August 21, 2023

Good morning.  

We continue to see price action declines in the major indexes. Down trending price action in the Dow, Nasdaq, and S&P 500 indicates a bearish sentiment in the stock market. It means that the prices of the majority of the stocks in these indexes are declining.  During down trending markets, it is important for a swing trader to prioritize risk management. One key strategy is to use tighter stop-loss orders to limit potential losses. 

This is what we did with CPB yesterday.  Moving averages provide us with levels of support where we can place our stop limits in the event of price action decline. Yesterday, we set stop limits just below the 20-day SMA. CPB price action gapped down below the 20 at open and wicked up triggering the sell order. We paper trade exited the position with a $100 loss, which was the limit of out risk/reward ratio of 1:2. A risk-reward ratio of 1:2 means that a trader is willing to risk one unit of their capital to potentially gain two units of profit. In this case, the risk was $100 of loss for a potential $200 of gain. 

ALGT closed up yesterday, however it still has not produced a positive crossover of the MACD.  

APD also closed up yesterday but with an RSI that is still below the 50 level.  

Patience is an ssential trait for a swing trader. It is important to wait for the right opportunities to enter and exit trades, rather than rushing into or out of positions based on emotions or impulses. 

Patience allows a trader to stick to their trading plan and risk management strategies, which can help reduce the likelihood of making impulsive decisions and suffering large losses. Patience helps us preserve our wealth. 

Overall, the goal of risk management during down trending markets is to minimize potential losses and preserve capital for future trading opportunities.  Have a great day!  This information is for educational purposes and is not a recommendation to buy or sell a security.

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