Trade Management (when to sell) when trading a Breakout Strategy
FetteredChinos
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when you are getting close to the ATR from the move from the recent low.
eg, if yesterdays low was on the dow, say 10,800, and the atr is approx 75-80 points, i would start to think about an exit , assuming an breakout long at the 10,870-10800. and then look for confirmation of a reversal. eg engufling bars, 1-2-3 patterns etc.
remember, its best to let your profits run as long as possible,..
fc
eg, if yesterdays low was on the dow, say 10,800, and the atr is approx 75-80 points, i would start to think about an exit , assuming an breakout long at the 10,870-10800. and then look for confirmation of a reversal. eg engufling bars, 1-2-3 patterns etc.
remember, its best to let your profits run as long as possible,..
fc
Rhody Trader
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There are a lot of potential exit strategies. The aforementioned ATR is certainly one option.
My own personal strategy is to use important support/resistance points as trailing stops. Basically, I'm looking for the point which if breached tells me the move is over, or at least that the momentum as eased.
I also try to have an idea where I think the market will go after the break. Once it reaches that level I start getting very tight with my trailing stops.
My own personal strategy is to use important support/resistance points as trailing stops. Basically, I'm looking for the point which if breached tells me the move is over, or at least that the momentum as eased.
I also try to have an idea where I think the market will go after the break. Once it reaches that level I start getting very tight with my trailing stops.
TheBramble
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BM - if you're trading a channel BO then a popular (?) and simple profit target strategy is one linked to the width of the channel. Either the range of the 'width' or some fraction (Fib?) thereof.
Personally, I'd watch the Price and Volume action to identify a 'useful' exit point and as RT says above, S&R are good places to be extra alert.
And FCs advice on letting profit run as long as possible is a new one on me. I must remember that one.
(Note to Sharky: How about giving us a 'chin' icon?)
Personally, I'd watch the Price and Volume action to identify a 'useful' exit point and as RT says above, S&R are good places to be extra alert.
And FCs advice on letting profit run as long as possible is a new one on me. I must remember that one.
(Note to Sharky: How about giving us a 'chin' icon?)
TheBramble
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Hmmm....I wondered if I was going to be caught out....JumpOff said:
Both.
Normally 'just' the channel width (range: max-min), but some sources suggest there is a basis for taking the period of time the channel has endured as an indicator of the proportional strength/length of the subsequent BO.
Perhaps others can comment on the efficacy of this latter method and how they 'weight' their target using it as I do not.
I did research this phenomena in quite some depth at one stage, but it all got a bit Gann-y and I had to go and have a lie down.
