Section
Stock Trading
The decisions that come after you know how to place an order: when to add to a position, when a new listing is worth trading, what a short sale costs to hold, and which setups to leave alone.
Most stock trading mistakes are sizing mistakes dressed up as analysis. Adding to a winner before the stop has moved, trading a new listing with no price history to put a stop under, and holding a short while the borrow fee climbs all come down to a risk the trader did not price in advance.
The position size calculator turns any entry and stop into a share count. The free course on filtering weak setups covers the other half of the job, which is recognizing the trades that should never reach the order ticket.
Free courses
All courses →Intermediate · free
Hands Off the Buy Button: Filtering Weak Setups and When to Sit OutActive traders who take too many trades and want a written filter that says no before the order goes in.
Columns
All columns →Rulebook
Adding to a Winner Only Works if the Stop Moves FirstAdd to a winner only after the stop has moved, so the whole position risks no more than the first lot did, and only on a fresh setup.
Argument
Skip an IPO's First Day and Let the Chart Form FirstSkip the first day of an IPO and wait for a base or the first quarterly report, so the stop has a price history to sit against.
Answers
Concepts
- Lockup period
A contractual period after an initial public offering, usually agreed with the underwriters and disclosed in the prospectus, during which insiders and early investors may not sell their shares.
- Stock borrow fee
The charge for borrowing shares to sell short, quoted as an annual rate and accrued daily on the market value of the open short position.
Quizzes
- Bait on the Chart: A Quiz on False Breakouts and Bull Traps
Whether you can tell a breakout that holds from a bull trap, using the close, volume, higher time frames and the story behind the move.
- The Blind Spot Quiz: What a Price Chart Leaves Out
Whether you know which facts sit off the chart, from the earnings date and share count to borrow, liquidity and your broker's margin rules.