Chasing stocks that have moved up a lot usually the people who chase stocks are those people who end up losing a lot of money. Those other ones who will have no understanding about trading and it’s just because it has moved up a lot then everyone is talking about it.
Can you imagine this? After it has moved up a lot, everyone is talking about it then this friend telling me you should buy this stock as it has run up a lot, another person coming down you should buy this stock he has run up a lot. That’s how people make a decision to buy but without looking at how far it has gone already.
So my suggestion is if after it has gone up very significantly, don’t worry, leave it as it is. Don’t be tempted to try to chase it because there are so many opportunities around.
If he has run up a lot, you will want to wait for a huge correction to come in first or you should at least wait ok if let’s say for a stock that has grown up a lot ready, the only two scenarios I will look at getting into this stock again is either you see a very significant correction and then it starts to reverse at a key support level, that is one time I might be looking at it.
If let’s say the heavy correction doesn’t come in, it is still possible to get in again but you would have to at least see it going sideways or consolidate for a period of time.
So don’t chase right immediately right after he has run along.
So after he has run a lot, either wait for it to pull back significantly for a reversal to come in again or you wait for it to stabilize and consolidate and go sideways before you see the breakout then you get it again.
That is the only two kinds of scenario I will be looking at getting in at a stock that has run up very significantly.
Usually, patience at these kinds of scenarios is that actually the most important. So be patient and wait.
If you miss the move, it’s ok, there are still a lot of opportunities out there. So don’t try to chase. Wait until it has at least pullback or wait until it has at least consolidate.
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