V. 19:5 (83): Q&A by Don Bright
Product Description
EXIT SIGNALS
I always believe that entry signals for trading are not so important compared with exit signals. Both “cut your loss” and “ride your profit” strategies are exit signals. What’s a good strategy in terms of profit-taking signals? What criteria should I adopt in profit-taking mode?— K.M. Lim, via e-mail
We try our best to teach our traders to read the tape for both entry and exit points. Since we may go in and out of the same stock many times each day, we use minor intraday changes in our indicators for both entries and exits. Sometimes the best exit is actually a small loss (cutting losses, as you mentioned). As far as taking profits is concerned, we use the same criteria, such as a rolling over of the Spoo (Standard & Poor’s 500 futures) or a downturn in the trading sector index. Many times we buy a stock at, say, 51, sell it at 51.50 (it may downtick to 51.25 or so), buy it back for the upturn, and repeat this process. ...continuded
I always believe that entry signals for trading are not so important compared with exit signals. Both “cut your loss” and “ride your profit” strategies are exit signals. What’s a good strategy in terms of profit-taking signals? What criteria should I adopt in profit-taking mode?— K.M. Lim, via e-mail
We try our best to teach our traders to read the tape for both entry and exit points. Since we may go in and out of the same stock many times each day, we use minor intraday changes in our indicators for both entries and exits. Sometimes the best exit is actually a small loss (cutting losses, as you mentioned). As far as taking profits is concerned, we use the same criteria, such as a rolling over of the Spoo (Standard & Poor’s 500 futures) or a downturn in the trading sector index. Many times we buy a stock at, say, 51, sell it at 51.50 (it may downtick to 51.25 or so), buy it back for the upturn, and repeat this process. ...continuded
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