Just to clarify, we are talking about positions that have initially moved in your favour. I'm assuming that you have a stop in place when you enter the trade and exit your full position if that stop is hit. Or is the 2 day low process your exit strategy from the start of the process.
Maybe you find hints on the chart that help you find out wheter there is still upwards pressure.. price action, volume at sale bars... These kind of stuff
"Should have", "could have" and "would have" are three of the many enemies any novice to intermediate trader face daily. And it is a fight that needs overcoming!
An approach in trend-following might be to focus on new entry opportunities as exit signals. So every time you're already long in an uptrend and price action starts to look like what would normally qualify as a buy signal for your strategy, close the existing long and set a buy order for the next one. I only enter using orders, never live, and its possible to set the order ahead of price in the direction of the trend, so that if the trend is not actually resuming, price does not reach the entry level and the order is not triggered - it can then be either cancelled or adjusted.
If you having to ask, you are missing 99% of your Trading Plan which is risk management. So many people get into the markets without having a clue to do well, you need to study huge amount of ends of trend. Trading is like buying a automobile, you start moped engine car and as your experience gains you either go towards sports car or practical style. You start collecting exit patterns and they are well defined. You accumulate patterns more time you put into efforts of study. Long term I use monthly timeframe, divergences between price and volume/open interest, whether small breaks like on 2007 highs, currently huge reduction of open interest in ES, MACD going weirdly up beyond last 20 years and angle of price pattern. I have detailed patterns/relationships learned by much study. But coming in to ask when to sell, there is no real good one answer that covers everything.
Good question, and right re full position exit with hard stop on day of entry if hit. Starting the next day I scale out at 2dlow if it moves against me, or scale in if it goes up, in my favor
You will never know. You either sell too late or too early. Very seldom you will sell right at the top. Imo, it's far better to have sold too early (albeit very disheartening at times) than having sold too late when the price has tanked so much that it's turned into a loss. At least when you have sold too early, it would've been still a profitable trade, just not as profitable as how it ended up to be in the future. But then again, nobody can predict the future. The bottom line is, you made money. That's always the most important thing.
You should sell before the price starts to go back up. If you wait too long, you risk having to sell at a lower price than you would like to get. When a price rises a significant amount in a short period of time, it is possible for it to return to a more normal level. So sell only when the price begins to drop. All the best
another really good way is to determine the probability of a move.......then you will know whether there is a lot to go or only one more swing. this is for more advanced traders