daytrade diaries... november 25, page-53

Some Daytraders might be interested in this techique of trading better stocks.
One of the techniques I like to use on stocks I like in the longer term is what I call my trade for free or “freebies”.
I only apply this technique where I believe there is potentially higher value in the future. Let say I take a $100,000 position in this trade & it quickly moves to say $130,000 rather than sell all the stock & complete the trade I will elect to sell $100,000 & keep the balance i.e. $30,000 for free. Given my capital has been released I am quite happy to let this free stock perform over a long time period.
Whilst this method doesn’t given maximum value if the stock continues to run higher, it does at least maintain a position for me that I might not have otherwise had in this stock.
I am also prepared to re enter a trade on this stock & try & repeat the process in the hope of building more free stock out of the trade.
Often over time these free stocks perform very well & I still have my original capital returned to start out afresh in a new stock. One of the negatives is that you tend to build up a large more diverse portfolio to keep an eye on, so management does become a bit of an issue.
Whilst there is no perfect method I have found this technique does help my trading method given I often find stocks making quick breakouts soon after enter to the trade.
Regards
Buffett