Page 15 - Buildingastrategy

BUILDING A STRATEGY PART 6

RECOVERY TRADING CONTINUED

What followed on the index was a nice price rise which allowed me to exit the

trade before the transfer window for a nice profit.

In-Play Trade Conclusion
I bought 50 shares of Aubameyang at £2.24 per share = £112

Sticking to my rules (building a strategy part 4) I would have exited the trade at
£2.26 per share, minus 8p spread = £2.18 per share = £109 total, minus 2%
commission = £106.82 for a Total loss of £5.18

Recovery Trade Conclusion
I kept 50 shares of Aubameyang at 2.24 per share total = £112 and by the end
of the day he dropped to £2.19 per share so I was holding at a very small loss.
I sold 50 shares of Aubameyang ten days later at £2.55 per share = £127.50

minus 2% commission = £124.95 Giving me a pre commission profit of £15.50
and a post commission profit of £11.95 around a 10% return on investment.

You can apply a recovery trade to almost any strategy just make sure the
reasoning is good. Holding a player hoping for a recovery trade opportunity
could result in a bigger loss and the money is better invested else where.