Safest Buy Level
Where is the safest, or best risk:reward ratio place to buy that also encompasses the characteristics of a trade that will quickly resolve in one direction or the other? Well for the me the safest place to buy is in the long flat base that occurred from August through early December(see the chart above). It is safest because we can be assured if the rally begins we are at a very low buy level. We can also place our stop below the base. Our risk:reward is extremely favorable.
What is the downside? You have dead capital sitting in a trade for who knows how long. I had dead capital sitting in this name for an extremely long time. Looking back on it, what that the best move? As I am always looking to improve, I would have to say no that was not necessarily the best way to play this.
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