Confirmation Day enables risk-controlled stock picks
The Gorilla wholeheartedly believes in the expression, “Give a man a fish and he’ll eat for a day. Teach a man how to fish and he’ll eat for a lifetime.” What the Gorilla believes even more is, “Give a man a stock tip and he may make a quick profit. Teach a man how to invest and he may profit for a lifetime!” GorillaTrades could simply list those new stocks that appear on the radar screen each evening and subscribers would have straightforward results. However, as longtime subscribers know very well, the Gorilla likes to educate his subscribers along the way, letting them customize GorillaPicks to their own liking.
While GorillaTrades follows “the rules of the jungle” exactly for recording purposes, regarding when to purchase and sell, this is comparable to playing poker with an open hand. Subscribers have the advantage of being able to vary their trading behavior, which the Gorilla advises. Subscribers have the option to trade GorillaPicks “by the book,” or to choose to follow their own set of rules, using the GorillaPicks as a guide. Here is one excellent example:
When it comes to recording results of each GorillaPick, the purchase of EVERY GorillaPick that triggers (by virtue of the fact that it trades higher than its listed “buy” price) within five sessions after first being listed is recorded. GorillaTrades doesn’t have the luxury of recording only those GorillaPicks that experience a Confirmation Day.
Every once in a while, you may find yourself buying a GorillaPick after it triggers, only to have it drop immediately. Why? Because so many subscribers do not heed to the Gorilla’s advice about being patient. Many quickly jump the gun, by entering their “limitless” buy orders before the market opens. (The only acceptable excuse for this behavior is if you have no other choice because you do not have access to the market after it opens.) This “herd” behavior often gives the immediate illusion of a Confirmation Day. However, a quick failed gap on the open does NOT signal confirmation.
The Gorilla understands and respects the marketplace. He also knows that no system can ALWAYS outperform the overall market without adjustments and guidance. “Trigger” prices are accounted for within the portfolio to alert subscribers that a particular GorillaPick could produce above average market returns. Ultimately, the Gorilla is trying to educate his subscribers to avoid false “triggers,” which over time could be costly to performance! Why isn’t the Gorilla being totally precise? The answer is simple: He is trying to give as much information as possible, without causing “herd behavior” among subscribers, as such behavior (like purchasing every new GorillaPick immediately at the open, every time) ultimately hurts the overall performance of ALL GorillaTrades subscribers.
The Gorilla believes that during strong periods in the market, you can enter orders without waiting for confirmation because a very large percentage of GorillaPicks do go on to have a Confirmation Day. However, during weak periods, in which an unusually low percentage of GorillaPicks confirm; waiting for a Confirmation Day is paramount. It could very well make as much as a 10%-15% difference in your overall return! Most of the GorillaPicks that stop out with larger-than-normal losses are usually those that never experienced a Confirmation Day. Waiting for confirmation eliminates most quick losses. The Gorilla advises that unless the overall stock market is displaying great strength, less aggressive subscribers should try to wait for a Confirmation Day before purchasing any GorillaPick (or any stock for that matter).
So, with no further ado, please let the Gorilla introduce the concept of the Confirmation Day to those not familiar with it, and a refresher course for those that are familiar with it.
Confirmation Day: n. An event that occurs as a result of above average daily volume that fortifies a stock’s desired direction. ex. Any point in time that a stock trades at or through a “trigger price,” with above average volume, and has been authorized for purchase under GorillaTrades rules. A strong trigger day can also be a “Confirmation Day.” A “Confirmation Day” can occur for the triggered stock at any point in time after the initial trigger price has been surpassed. In addition , a GorillaPick must close HIGHER than its trigger price (and higher for the day) and a GorillaShort must close LOWER than its trigger price on the day it is to be considered “confirmed.” What exactly constitutes a Confirmation Day? To initially confirm, a triggered GorillaPick must do ALL of the following on the SAME day:
A GorillaPick must CLOSE higher than its previous close AND higher than where it opened.
A GorillaPick must CLOSE higher than its trigger price.
A GorillaPick must meet or exceed its specific volume level area.
How does the Confirmation Day theory take volume in to account?
Should we observe a trigger point, then wait until the next day to see if the stock trades higher, before purchasing it?
Is a Confirmation Day a day in which a GorillaPick “closes” higher than the “trigger price?”
A Trigger Day (the day a new potential GorillaPick trades higher than the “buy” price) or a “Confirmation Day,” in any type of market, usually displays significant volume (greater than the average daily volume). A “Volume Confirmation Area” is provided
A strong “Trigger Day” can also be the a “Confirmation Day.” The Gorilla is trying to protect his subscribers from days where a trade is entered by just a “print” trigger price, with no accompanying volume confirmation. A GorillaPick that does this has a greater chance of underperforming.
“Trigger price” is activated with volume greater than the daily average (the Gorilla uses a stock’s 21-day moving average volume), this may also constitute a “Confirmation Day. ”