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Very good start for an important thread.
I think the hard part is what to do once in?
"do I get out here or does this trade have much further
to go."
I learned that its all much easier if you know what you want and what
not. The what not is just a stop loss - hopefully not far away. If you
are in a trend and are long, check the average distance between a days
open to the lows. Of course in an uptrend this will be much less than in
a downtrend. So if this range gets expanded, the whole uptrend is in
question and you donīt want to be in anymore.
The what I want question is a bit harder. If you are in an uptrend, the
market just shouldnīt close lower; if the trend is up the market should
at least not close on its lows, even if this can still be a positive
close. what about the difference between other days highs and the
close-this gives you a certain range and as long as the market closes
within it, fine. if not the trend might be in danger and you should be
out.
Depending on what you are trading and how your personality is, you can
come up with all kinds of criteria. But criteria is a very useful
instrument, since once you have it, you can just put your stop in, do
other stuff and return for the close to see if you need to get out or -
based on other criteria - add. So you donīt really have to keep your eye
on every tick and can easily check other possibilities out.
Regards - Ulrich
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