We know that we always strive for a 5-1 trades, however sometimes the names just doesn't have the juice to get them where we'd like to see them go. REGN was a good example of this, as you can see from the chart. REGN has been lagging some what in this BioTech rage lately. After seeing it gap down near its prior breakout level.
It was starting to come down into that prior resistance area. As it got tight and started to base, it looked like a low risk entry that could potential be a 5-1 trade.
The original GP was to buy $440 with my out versus the lows of $425 ($15 risk) with a target of around $500+ (+$60 gain on $15 risk). After the first buy (early) it pulled in and put in a higher low (good sign) Than added again back up through that $440 level.
Day 1 started to work, nice $10 point pop from entry, still same GP.
Day 2 nice follow through, and another now a $15 point move, at this point the stop was now moved up to break even ($439.89)
Day 3-5 pull in,digestion, and we could see that $450 area hold to the penny, after it turned up through those highs, stop was moved up vs that area ($449.98)
Now REGN was halted on the day it flushed up to $477, so the next few days would be key. Are the buyers ready to take that high out or are they tired?
After that 2nd day after the halt, if you pretended that flush up didn't happen, it look like a doji at highs on a short term move right? These are usually the times, where the novice trader would see "I'll sell above $477!" and give the whole trade back.
So I'll take half off for a quick $30 point chop, and give the rest vs the the prior days lows, and some back to my price just in case. If it wants to go Im in, if not, so be it, its just a trade.
Next day sold for a $20 point stop out, and gave 10% back to my price losing a whopping $.19 on those shares in a $400 name.
Now was it a 5-1 trade on my original risk? That answer would be No, however given what the market was telling me, I took the trade made a chop and will buy that fucker again through $440 for that eventual move through highs.
So are there times when we have to change our plan? Of course, remember our game plans are written on paper, not stone.