Trading VLO | Stock Trading for August 28, 2006

Stock patterns shown on this site occur every day. Today a BS2 signal was alerted for the oil stock VLO. Valero Energy Corp. has been on a tear the last few years as oil stocks have skyrocketed along with the price of oil. Lately the stocks have slipped though. VLO gapped down in the morning and proceeded to trigger the pattern to short. .3 = R.  Let’s look at the trade.

The trigger to short VLO hit as soon as a lower low candlestick traded. A stop was placed a penny above the prior bar’s high. A target of 2R was set for the trade. As you can see, 1/2 the shares were sold for 1R and the other 1/2 for 2R. Next time a trade like this pops up, it may be better to sell 1/3 at 1R, 1/3 at 2R and 1/3 near the close. Trading VLO was successful, but it’s good to work on getting the most out of every trade.