Putting It All Together
This chapter gives you more trades that I made with my own money in the market. Use them as a quiz to test what you've learned.
For the most benefit, pull up each trade on your computer and view it on your trading setup. Decide whether there is a reason to trade each stock. Look at the general market and any trading indicators that you like to use. Search for chart patterns because that's the point of this book. I show each stock twice, the first figure has little detail. Decide whether the trade is worth making. The second figure shows how I traded it. All figures use the logarithmic price scale.
Figure 9.1 shows a chart of IMC Global (IGL). In August 2004, the Justice Department cleared the merger of the company with a unit of Cargill, so it may be difficult to find the historical prices.
Gina's birthday is coming up and you want to buy her a new car. The problem is your petty cash is low so you go hunting for a trade and find the stock shown in Figure 9.1. At point A, do you buy the stock, hold it, sell it (assuming you already owned it), or sell it short (which suggests the stock will tumble so you can buy it back at a lower price)?
Doing nothing is always an option, but Gina would be upset at not receiving a gift, and she might tell your wife that ...