Reblog: 10 Signs a Trade is About to Go Bad
Most traders have been in that one monster, parabolic trade where they made a killing. The problem is the exit. It is important to always be wary and plan a trailing stop to get out of your huge winners. So many investors and traders just get lucky, get in the right trade at the right time, and catch a monster trend. Their patience to hold pays off by catching a full move in their favour by letting their winner run. Unfortunately, this patience is a liability if they also hold all the way back down, coughing up big profits. One part of the exit is a well-placed trailing stop under a near term support price, or moving average. Additionally, you can use the psychology of the market as an indicator that it is time to look for a profitable exit.
10 Signs Your Big Winning Trade Is About To Go Bad and it is time to look for the exit.
- If they put the ticker symbol, currency, commodity, or index that you are trading as a live permanent quote on CNBC, the end of the trend is near.
- If a bull or bear is on the cover of a major national magazine, that market is very close to ending.
- If you are on the side of the vast majority of traders, and people against you are vilified, then the trend is almost over.
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