Value Level: The price at which to buy on weakness during the time frame referenced: W-weekly; M-monthly; Q-quarterly; S-semiannual; or A-annual. You buy on weakness to establish or add to a long position, or cover a short, or become less short.

Pivot: A price that should be a magnet during the time frame referenced: W-weekly; M-monthly; Q-quarterly; S-semiannual; or A-annual.

Risky Level: The price at which to sell on strength during the time frame referenced: M-monthly; Q-quarterly; S-semiannual; or A-annual. You sell on strength to establish a short position or add to a short position, or remove a long position, or become less long.

I advocate the use of good-'til-cancelled limit orders to add to long positions or become less short on share price weakness to the value levels. Traders should enter GTC limit orders to reduce their long positions or to add to a short position on strength to risky levels.

At the time of publication, the author had no positions in stocks mentioned.

This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.

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