Profitably Late

In most activities, being late is not good. But in trading, being late can be just as good as or better than being early because all risk calculations depend on two factors: the projected reward for each measure of risk taken and the probability of the trade ending profitably. The latter benefits because the market shows its hand while you wait. So the longer you wait, the better read you'll get on the probability of the trade hitting its projection before taking out a protective stop.

Friday, Valmont Industries (VMI) reported second-quarter earnings. It already had quite a run over the past few weeks, moving from a low near $88 up to $105, but earnings served to juice it up further, pushing prices near $111. Is it too late to buy? I don't think so. In fact, the buy is likely above the comfort support zone shown on the daily chart below....454 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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