dear friends in elite trader hey! How do you determine whether a trade go long with your strategies while a trade is still open? What indicators or factors do they consider to assess the potential profitability of staying in the trade?
I just use trends to tell me to go long or short a stock for instance. If the stock is going up, trend is up and you should take a long position in said stock. Now, as to how long to stay in the trend? As long as the trend is intact, I would stay with the trade. Take note, even an up trending stock would have its pullbacks (counter trend moves to the downside). That does not negate the trend by itself. The easiest way to determine if the trend is likely, to continue is to draw a trend line. As long as the stock price closes above the trend line, you should remain long that stock. If the trend line breaks, you should sell that stock and re-evaluate that position.
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The easy answer is RISK. Smart traders base everything on risk. Whether the market is shooting to the moon is not a criteria. You'll stay in the game longer if you condition yourself to focus on risk factor for every trade before determining potential profitability. Therefore staying in any trade is based on how much risk you are trading and how much you can lose. Placing the cart before the horse is not a good strategy for the long haul.
Potential profitability depends on the immediate trend. Stay in the trade while the immediate trend is working for you. You can either stay in Natural reactions or take your profit and buy back on new buy signals. If you stay during reactions then the price better be recovering the deep in earnest and with ease. Any reaction that doesn’t look normal is a danger signal. Watch the price, time and volume. You can use a simple moving average. Maybe a 10 or 20 sma. If the price close below the sma then close your long position.
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