I sent out this short set-up in $LBTYK for April 27 to everyone who signed up for my free Daily Trading Idea ... sign up now if you haven't already done so.
Here's the image I sent in the email ... I checked my records and I did short $35.10 at 2017-04-27, 12:09:35 on ISLAND, no doubt by accident after transposing the numbers ... I do this at least ten times a day, make trading mistakes I mean ... confidence-inspiring, I know).
Seven days later it looks like this:
So the question is what do you do when it gaps below the target? I'm going to cover half tomorrow morning and trail the stop above today's high of $32.54. I can see this thing going down to $29 or even $26, but I want to take half off the table now. If you have any better ideas, I'm eager to hear them (on Twitter or via email), and I will share them in turn!
Initial risk was 44 cents and the target was over $2 away so the risk/reward was 1:5, and if I cover near where it closed it will be closer to 1:10 ... a "ten bagger."
UPDATE: @DavidTaggart suggested moving the stop to the high of two days before every time it makes a new low. @Contrahour suggested an Average True Range based stop, which is a little more complicated, so I'll go David's high of two days ago for now.