How do I know where to put my stop loss/take profit?

tomorton

Legendary member
7,262 970
Okay what time periods do you use on your MAs? I have also traded with them on my practice account using 50, 100 and 200 but couldn't work out points of entry. Do you then work out the S/R price ranges and enter when one is breached?

I use 50 and 200EMA to identify underlying trend - if the 50 is above the 200 and price is above the 200 and has risen over the last month, that's a pretty good indication of an energetic uptrend. I rarely go long if price is below the 200.

After that, you can use any handy signal that suggests continuing buying pressure - a hammer after a downleg, a bullish candlestick that is clear above the 50SMA and closes less than 25% off its daily high, a higher range daily bar that closes above the previous day's high after at least 3 consecutive lower range days etc. etc. There are dozens and to be honest, I don't believe any one of them possesses any kind of magic - even price is just an indicator.

At the heart of it all, you can't know which move will continue and which will sputter as soon as your trade is placed. Going with the trend will help. As will avoiding overhead resistance or round numbers. TA off-chart indicators are often portrayed as the gizmo that only gets you into a sure thing: fear of loss is behind this sales technique. For me, building something into my systems that is there to treat a side-effect of doing business is just a distraction and a distortion of my plan. Losses come with the territory and they're not the problem.
 

Bradleyule

Junior member
26 0
I use 50 and 200EMA to identify underlying trend - if the 50 is above the 200 and price is above the 200 and has risen over the last month, that's a pretty good indication of an energetic uptrend. I rarely go long if price is below the 200.

After that, you can use any handy signal that suggests continuing buying pressure - a hammer after a downleg, a bullish candlestick that is clear above the 50SMA and closes less than 25% off its daily high, a higher range daily bar that closes above the previous day's high after at least 3 consecutive lower range days etc. etc. There are dozens and to be honest, I don't believe any one of them possesses any kind of magic - even price is just an indicator.

At the heart of it all, you can't know which move will continue and which will sputter as soon as your trade is placed. Going with the trend will help. As will avoiding overhead resistance or round numbers. TA off-chart indicators are often portrayed as the gizmo that only gets you into a sure thing: fear of loss is behind this sales technique. For me, building something into my systems that is there to treat a side-effect of doing business is just a distraction and a distortion of my plan. Losses come with the territory and they're not the problem.
Okay I kind of understand. Is there any resources you could recommend to me so that I can learn it all further?

Thanks for your help so far, appreciate it.
 

tomorton

Legendary member
7,262 970
Okay I kind of understand. Is there any resources you could recommend to me so that I can learn it all further?

Thanks for your help so far, appreciate it.

Sure. I'd really recommend -
Marc Rivalland on Swing Trading, Marc Rivalland
Street Smarts, Connors & Raschke
titles on candlesticks or chart patterns by Thoas Bulkowski (or see his thepatternsite.com)
The Ultimate Trading Guide, Hill, Pruitt & Hill
The Master Swing Trader, Alan Farley (but only after the above)

But there are numerous others to pick from according to personal taste / style.
 

Bradleyule

Junior member
26 0
Sure. I'd really recommend -
Marc Rivalland on Swing Trading, Marc Rivalland
Street Smarts, Connors & Raschke
titles on candlesticks or chart patterns by Thoas Bulkowski (or see his thepatternsite.com)
The Ultimate Trading Guide, Hill, Pruitt & Hill
The Master Swing Trader, Alan Farley (but only after the above)

But there are numerous others to pick from according to personal taste / style.
Okay thanks for all the advice!
 

tradesnprofits

Newbie
8 0
for starters i usually use support and resistance level for my SL.
 

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