Stocks finished off Friday’s session in impressive fashion… and closing out the week with some of it’s best gains its had all year.
A weak job numbers today pretty much sealed the deal that the Fed will be stepping in this year and cut rates… some Wall Street Analysts believe it will happen two or three times.
That said, the fear of a trade war with China has now been put to the wayside for now.
And to be fair, I am not a news trader, I primarily focus on charts because trading off news has always been noisy.
Plus I don’t like to be glued in front of the screen all day.
I love trading, but there are other things I love too.
(If my market isn’t showing up, I sit on my hands and stay patient. Sometimes I’ll relax in my pool house, want to know what I’m about, learn more here.)
Now, many of my client’s have no choice, they work full-time jobs or are busy taking care of their family… that don’t have the time to stare at every tick in the market.
Which leads me to a question I get often:
“How do I execute and manage a trade if I work full time?”
Read on to learn more, as well as, what order types I like to use when I’m not in front of the screen’s all day.
One question I get asked a lot is, “How do I execute and manage a trade if I work full time?”
Very often, I’ll hear people say something like, “I can’t trade since I have a busy work schedule… I can’t afford to stare at my screens all day.”
You see, there’s a common misconception with trading…
… it seems like these Wall Street movies have ingrained in a lot of people’s heads that all traders have to have their platform up at all times.
Well, that’s simply not true.
In fact, there are a lot of busy professionals in Petra Picks, and once I showed them how they can trade, despite their work schedule… they realized they can still have a steady income stream from trading.
That said, let’s take a look at some ways to execute and manage your trades… even if you work a 9 – 5.
You Don’t Have to Watch the Market 24/5
For the most part, brokerage platforms offer various order types. Now, these order types allow us to set specific areas where you want to buy and sell a stock.
You might be wondering, “Well Petra, what if I don’t know where to buy and sell a stock?”
Now, I actually use technical indicators to signal when I should get into a stock, stop out… and take profits. If you want to learn more about how to time your entries and exits, click here to learn more.
Here’s a look at how my charts look.
It might look confusing to you at first… but all you really need to be focus on for this is the horizontal lines.
These horizontal lines allow us to identify when we should get into a stock… where we should stop out… and take profits.
For example, in the chart above you’ll notice a red horizontal line… that’s where the initial stop-loss order is… above that, you’ll see two green horizontal lines… that’s where we want to get into a stock.
You’re probably thinking, Petra… I don’t have time to monitor this stock to see whether it breaks above those green lines to get in.
This is where conditional order types come into play.
Conditional Order Types
Now, you should ask your broker what type of conditional orders they have, like One Triggers Another (OTA)… because if you’re a busy professional, this order type will be your friend.
You see, an OTA – sometimes called One-Triggers-the-Other (OTO) – order allows you to set conditions of where you want to buy and stop out.
For example, let’s say you want to buy U.S. Foods (USFD) between $33.78 and $34.15, as shown in the chart earlier.
Now, more specifically… you want to buy at $33.90 (just as it breaks above the first green line).
Well, you can actually enter an OTA – or OTO – order.
So when you enter this order type… you would place a limit order for buying the stock at $33.90… and a stop order for selling your shares in case the stock moves against you.
Let’s say you want to buy 200 shares of USFD at $33.90. Well, your primary order would be a buy order at that price… thereafter, you would set a secondary order (this is where we enter our stop).
Now, remember the red line? Well, you can stop out at say $32.90, just below the red line.
So once your buy order is executed… it would trigger your stop order.
If the stock gets below $32.90… you would sell your shares and take a small loss.
This is how we define our risk from the start… so we don’t get emotional about our trades.
The next important step is setting targets.
Check out this chart below, we’re going to be using it as an example for profit taking.
Notice how there are 3 horizontal lines above $34.15 (the top range of our buy zone).
Those 3 horizontal lines are profit targets.
Now, if you don’t know… you can actually set orders after the market closes.
For example, let’s say you set alerts for when you get filled on your buy orders…
Well, at that point… you’ll need to set orders to take some profits if the stock moves in your favor.
For example, one of the first profit targets is $34.69.
So let’s say you bought 200 shares at $33.90, using the OTA/OTO order type… so your stop-loss order is already in.
You can actually set a limit order to sell, say 50 shares if it gets to $34.69…
What happens if the stock gets to that price?
Your limit order would get triggered and you would take profits on 50 shares.
Thereafter, you can move your stop-loss order higher, so you can minimize your losses in case the stock turns against you.
Next, you can place another limit order to sell 75 shares at the next profit target at $35.49… then the rest at $36.40…
Now, each time the stock moves to your favor… you can move your stop up. Let’s say the stock gets to $35.49.
You would take profits on 75 shares at $35.49 and be left with 75 shares at an entry price of $33.90.
Well, you can move your stop up to your entry… or your first profit target ($34.69) just to be prudent and not turn a winner into a loser.
Remember, you can set day orders (which would cancel if they don’t get filled by 4:00 PM EST)… or Good ‘Til Cancelled (GTC) orders which would remain live until they’re filled or you cancel it.
That said, even if you’re a busy professional… there are various ways to execute and manage your positions, without taking up too much of your time… all you have to do is a little bit of planning, and then you can “set it and forget it” (you’ll still have to keep an eye on your positions from time to time).
Now, if you’re interested in receiving watch lists that identify areas to buy a stock… stop out… and take profits – all based on my chart patterns, as well as real-time alerts, click here to get started.