Stocks & Commodities V. 29:11 (10-14): Identifying Stops And Targets by Jeffrey Kaprelian

Stocks & Commodities V. 29:11 (10-14): Identifying Stops And Targets by Jeffrey Kaprelian
Item# 179KAPREPDF
$2.95
Availability: In Stock

Product Description

Identifying Stops And Targets by Jeffrey Kaprelian

How do you figure out where to place stops and targets? Try using support and resistance levels together with the average true range.

AS a broker, I am often asked how to figure out where to place stops and targets. There are, of course, many different methods, ranging from not using them at all to using volatility-based figures. One of the most reliable is the use of support and resistance coupled with the average true range (Atr). I will demonstrate this principle using multiple time frames with two unrelated markets to show how truly universal it can be.

First of all, we must define support and resistance. The most basic understanding of support is a level where prices fail to make new lows. The opposite the failure to make new highs is true for resistance. They can be thought of as floors and ceilings.

SUPPORT AS STOP-LOSS

Figure 1 is a weekly coffee chart. Once the market makes a double low (points 1 and 2), we can use that as a temporary level of support. Observe how the market retraces at points 3, 4, 5, and 6 before it moves away for good. Often, the exact level (56.234) at which the dotted line is drawn is inconsequential relative to any major price points in this case, 56.000 when setting a stop-loss.

There is no guarantee that stop orders will be filled at the traders preferred price. Once the stop order has been triggered, it turns into a market order, which is then filled at the best possible price. The fill price may be higher or lower than the price specified by the stop order.




FOR THOSE ORDERING ARTICLES SEPARATELY:
*Note: $2.95-$5.95 Articles are in PDF format only. No hard copy of the article(s) will be delivered. During checkout, click the "Download Now" button to immediately receive your article(s) purchase. STOCKS & COMMODITIES magazine is delivered via mail. After paying for your subscription at store.traders.com users can view the S&C Digital Edition in the subscriber's section on Traders.com.




Take Control of Your Trading.
Professional Traders' Starter Kit
All these items shown below only $299.99!
  • 5-year subscription to Technical Analysis of STOCKS & COMMODITIES, The Traders' magazine. (Shipping outside the US is extra. Washington state addresses require sales tax based on your locale.)
  • 5 year access to S&C Archive
  • 5 year access to S&C Digital Edition
  • 5-year subscription to Traders.com Advantage.
  • 5-year subscription to Working Money.
  • Free book selection.
  • Click Here to Order