I posted 7 stock market picks from NYSE yesterday. I was anticipating the resumption of the down trend after Dow Jones hitting the resistance level and therefore I was using my shorting screen rule to picks those counters.
I had put a comment of the close price, stop loss price and target price for each stock. In addition, I also included the reward/risk ratio in the chart as well.
How do you read the stop loss, target and reward/risk ratio?
In every trading plan, we must know our stop and target price before entering the market. Stop is the price to close the position if it turns in favorable towards us. Profit is the price to put money into our own pocket.
The higher the reward/risk ratio, it means the expected reward is higher compared to the expected risk. So, in the last 7 counters I shortlisted, I selected HCC and NMX because their reward/risk is higher than the rest.
I found another interesting counter today using the same method, it is Dolby Laboratories. You can watch out for this stock. It is now trading near the resistance level and also hitting the 100d MA resistance.
DISCLAIMER: This information is used for learning purposes only. It does not constitute an offer or solicitation to buy or sell. You should do your own analysis on top of my postings.
