10 Signs That Tell You When To Stop Trading by Matt Blackman
Everybody is hunting for the best buy signals, but this focus
ignores a major trading reality: You donít earn a penny
until you sell. And you wonít keep it if you donít know when
to sit on your hands.
Making money in the markets is a 10/90 proposition
ó 10% buying and 90% selling, according to trader
Larry Williams. But take a look at any trading system
or service out there and youíll find they have one thing
in common ógenerating buy signals. When exit signals are
mentioned, itís almost as an after-thought to the main message. Educators and systems developers will tell you that the
sizzle comes from getting into the trade, leaving students to
learn about money management strategies, including when
and how to exit on their own.
It is the same old story when it comes to staying out of
the market. How many trading books have you read or seen
advertised that teach you when to sit on the sidelines than be
invested? Not many!
Why not? Itís simple. Exit strategies, money management,
and stepping aside simply arenít sexy. Meanwhile, traders are
happy to spend a bundle to get the latest buy signal, even though
they donít put a penny in their pockets until theyíve sold. And
itís easy to lose it all by trading an ugly market.
With these realities in mind, I thought it was high time to examine signs used by a well-known trader
to see what he looks for when heís exiting
trades and what keeps him out of the market
These are lessons that Dan Zanger, host of
ChartPattern.com, had to learn the hard way.
It was an expensive lesson but one that he says
is necessary for all traders need to learn if they
want to be successful. And what he learned
stood him in good stead in 2011.