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Originally Posted by MetaformX
Ok, let me clarify one thing on the 2% rule...THIS IS IMPORTANT: I was typing too much in the original and looking at it now, it does not seem very clear. The 2% rule takes effect not on the intraday, but on a CLOSE!!
So if I buy a stock, and it does not matter how the stock does in the intraday, the most important thing is the CLOSE! The close of a stock is the most important thing!! If it closes 2% below your entry point, then I sell it the next day on the open. I will not be selling VASO today, I will sell it tomorow if . And my entry on VASO is $1.25, thats where I got in as it moved too fast, so if it closes at $1.22 or below today, I will sell it tomorow.
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Your safeguard behind selling if it goes 2% below is non-existant in effectiveness unless it is immediate. If you don't know any information about the company, and solely go by a chart, and it goes down 2% it could go down another 20%. And even if it only goes down 2%, you'll likely have to sell it for less than it's current value to sell it.
Matt