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Byline: JONAH KERI
In a perfect world, we'd have all day to watch the stock market, free of other responsibilities. Actually, in a perfect world we might spend all day lolling on some tropical beach, but that's another story.
For most investors, neither scenario's realistic. Work and other obligations prevent most traders from watching the market as often as they might like.
Want a way to negate that problem? Use buy-stop orders.
No matter how you trade, being prepared beforehand is always your best bet. Build a watch list of leading stocks with great fundamentals. Study their charts carefully to locate the handle in the base. Add 0.10 to the top of the handle to find the pivot point.
Why go to all that trouble? Finding an ideal buy point before the stock breaks out lets you act quickly and decisively when the moment of truth arrives. Buying at or near the pivot can keep you in a stock that stages a normal correction soon after its breakout. Buy when the stock's up 6% or 8% above its pivot, and a normal pullback may shake you out.
When you can't be around to trade, buy-stop orders can help you nab a stock at or near its pivot.