Continue reading...If you have been following the NASDAQ index, you know that prices have been making all-time market highs lately, even though the other indexes have been stuck in a range. There are a lot of stocks that are also at an all-time market high. As traders, we know that we should participate in the dominant trend but base our exits on supply and demand zones. The biggest question when a market high has been hit becomes: where are we supposed to exit when we do not have a supply zone to mark the top?
There are a couple of technical tools that we can use to identify probable targets for our trades, both intraday and on swing trades. It is important to note that none of these are as strong as actual supply zones but they do seem to offer higher probability targets when we are breaking out into the unknown territory of market highs.
Measure Momentum The first method for determining where to exit a trade when a market high has been hit is one of the easiest. Before prices break to new...
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