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Risk Versus Reward—Is This Stock Really Worth It?

Book Description

This Element is an excerpt from Technical Analysis Plain and Simple: Charting the Markets in Your Language (9780137042012), by Michael N. Kahn, CMT. Available in print and digital formats.

How to choose stocks with the greatest profit opportunities consistent with reasonable levels of risk.

Unless transaction costs and the risk for a loss are zero, you simply cannot buy every stock that looks good. You need to concentrate on the stocks that have the best chances to make money at an acceptable level of risk. How can your potential profit be measured? Imagine you have your broker’s list of recommended stocks....