Posted by: eminitrader April 15, 2007
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Let's do some math here.
Stop Price: $1.40
Target: $7.50
Range: $6.10 rounded down to $6.00
Buy below Price: Range/4 + Stop Price
= 1.5 + 1.4 = $2.9
As long as it is below $2.90, it is okay to buy.
So your maximum potential loss is $1.5 per share if you were to buy at $2.90.
If you want to risk $150 on this then buy 100 shares, for $300 risk buy 200 shares and so forth. If you cannot risk atleast $150, then save some money and come back. If in the morning it opens above $3.00 and doesnot come back to $2.90, then pass on this trade and wait for another opportunity.