BMI got the axe and closed.

Today I got a nice little run up in the price of BMI. Went from about breakeven to close for $1.42. It popped to $2.00 up and I raised my stop but I happened to be checking my trades when I saw a large drop materialize...so I raised my stop again to $40 and got closed at $39.92...lost the extra 8cents due to the spread and the other 50 cents due to leaving it a chance of recovery.

I missed a nice short by 2 cents as I placed a limit order for GNK at $23.00...$22.98 was the high so far. I almost just market ordered it but decided to stick to my plan. It popped back up to $22.95 later and may yet hit $23 by day's end... but I doubt it as it is liking the $22.65 area.

I have a nice little harem of 7 stocks in action now, only one active trade. I think that I will even that up to ten for now which gives me a nice range of sectors and prices to keep some semblance of diversity. Some of the picks ended up from the signal service I tried but only as a result of being at the right price and point in the current trend.

I was finding many overlaps when I was running a parallel trial earlier and have determined that the service was really only giving signals based on P&F charting patterns. I don't know what criteria they used to keep the number of signals down but it does not matter as the best result should be gained from being familiar with a handful of stocks anyway. This makes it easy and quick to review the charts on a daily basis to determine what the next trade will be ahead of time. I hardly need a signal service to tell me what my basket of stocks are doing at any given time.

Last note about signal services, perhaps I already mentioned this sometime but they must be treated like any other indicator. There is no magic, not that I really expected any, and they must always be traded according to your own rules of entry and loss allowance.

Jeff.

BMI gets the axe.

I mentioned that BMI (Badger Meter Inc) might remain on my list of potential stocks to trade...I changed my mind.

I like a stock that has a very narrow bid/ask spread for a few reasons:

1) at the open there is less chance of a tight stop getting hit due to a wide spread
2) market order executions are more predictable, a penny here or there
3) wide spreads are indicative of low volume...or low volume creates wide spreads, whichever

My attention was too scattered over the past couple of weeks to really take note of the stocks that I was playing with or I would have realized that BMI is traded a bit thinly for my normal selections. The day is almost out and it has only traded 131K shares. While it is not too bad it has been brute in the morning as the bid/ask has been very wide right up to the last moment, today was a better day as my stop was wide and there was a $1 pop in after hours trading that pulled the last traded price up to $40. Alas it did not lead to a great jump in price. At least there is only about a 6 cent spread now.

Off to find some more selections to work with. Looks like PLCE and COP might be next in line.

My back testing takes forever but it gives me some feel for the stock leading up to the current period. I was doing a full year so perhaps I will cut it down to the last quarter or so. That is the most pertinent time anyway as trading patterns could shift over a year.

I am liking only having to loosely monitor prices during the day. Today I went ahead and set two limit orders for COP and PLCE to see if I would get in...very close. Within 12 cents on PLCE and COP may yet get nailed as it is at a daily low right now...23 cents off my order.

I will wait for my prices though, absolutely no price chasing in this plan.

Jeff.