Posterous theme by Cory Watilo

The proper way to trade Apple...

A couple weeks ago Apple (AAPL) jumped to like $207.  All time high and all that.  I put a stop loss at $200 (which was a bit low, but the stock can be quite volatile because, well....people are morons and sell the best company in the market for no good reason.  Stock dropped like a brick to $188, so I got out at $200 with a huge profit.  When it hit $188 I put in a buy for more shares than I had before at $191.  Apple is now at $203.  So, while most people would be down $4 from their high point, I'm up.  WAY up.  And I have more shares than I did before using the same amount of cash that was already in the stock.

That's the key to trading my friends.  A stock doesn't need to go endlessly higher.  A stock simply has to move.  It's up to you to look for the signs and get out on a drop, get more shares at the bottom of the drop and ride those toward new highs, or at least back towards the stock's average.

In other words, buy Disney at $20, ride it to $30, stop loss at $28, but again at $22, etc...stock didn't move much, but you jumped on the moves.

The more shares you have, the more profit you have with less movement.

Invest in peace...