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- 16 April 2007
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hi. i am wondering about how people handle stock buys on impending breakouts.
eg. XYZ is at 30c. there is resistance at 31c but all the indicators are looking good for a breakout. so i set the trigger at 31.5 to buy 5000 shares at that price.
only looking at the market depth i can see a few sharks circling. there are some big buyers in there lurking off the shallows and the volume outnumbers that of the sellers by a reasonable margin. i am worried that once the price breaches resistance everyone will pile onboard and the sharks will gobble up the first few ranks of sellers, as well as a million other stop buys coming into play. is this what generally happens? and if so, how likely is my stop buy to be swamped by the volume of buyers and the price overshoot my buy?
in cases like this (resistance breakout, blue skies, buyer volume greatly outweighs seller volume) is it better to set the stop buy price a touch higher so as soon as the price is breached you slide in and grab the shares a price point higher, while the sharks and stops fight for the shares at the trigger point?
so continuing with the example, if the trigger price is 31.5c, and i set a stop buy at 32c, am i far more likely to get my sale in before the feeding frenzy and the price spikes up?
danke
eg. XYZ is at 30c. there is resistance at 31c but all the indicators are looking good for a breakout. so i set the trigger at 31.5 to buy 5000 shares at that price.
only looking at the market depth i can see a few sharks circling. there are some big buyers in there lurking off the shallows and the volume outnumbers that of the sellers by a reasonable margin. i am worried that once the price breaches resistance everyone will pile onboard and the sharks will gobble up the first few ranks of sellers, as well as a million other stop buys coming into play. is this what generally happens? and if so, how likely is my stop buy to be swamped by the volume of buyers and the price overshoot my buy?
in cases like this (resistance breakout, blue skies, buyer volume greatly outweighs seller volume) is it better to set the stop buy price a touch higher so as soon as the price is breached you slide in and grab the shares a price point higher, while the sharks and stops fight for the shares at the trigger point?
so continuing with the example, if the trigger price is 31.5c, and i set a stop buy at 32c, am i far more likely to get my sale in before the feeding frenzy and the price spikes up?
danke
