TRADING TIPS

What to Do When a Trade Doesn’t Move

Hubert Senters here. Got a question from Robert. Hubert, A trading question. Suppose all technical indicators are pointing to all systems go on a trade, you pull the trigger and the market does not move first 2 days then a week, just chopping a little up, a little down. What do you do, pull the plug on trade or wait it out? What is a reasonable time to wait before closing out the position? Robert, that’s a great question. So let’s take this chart for example because I did a FREE video on it. This would be Google. Let’s say you have a signal here to go long. But as you can see down here the ADX is below $20 so it’s going to tell me like hey, you’re probably going to be sloppy and choppy. It might have a whole lot of follow through. So one thing I would put a filter in that and helps you avoid chopping the first place. And then second I would have a plan. So let’s say that you know that. Let’s go right click. Let’s go insert analysis. Let’s go average true range. That will give you a good example. So if you go average true range. Right there and on Google it’s going to be 14 period. So now, we’ve got an average true range on Google outside of what it did today. It’s going to be yesterday’s close around $60. So you have to figure out so for 14 days it’s going to move. The average true range that i’m looking back is a 14 period here. If I look at this 14 period which means 14 bar look back if it’s on a daily chart that’s 14 day. If it’s on a 5 minute chart that’s 14 5 minute bars. If I’m not expanding on that or getting close to that range then you may want to close that out after a week or two so those are two different solutions to your problem. One make sure that you’re within the acceptable average true range whatever look back period you’re doing. And then number two just try to avoid chopping the first place. That’s even better. Sometimes you can’t. Sometimes you get a bad spot and like oh, man what am I going to do? And have a checklist saying I am willing to give this thing two weeks. Now, I believe that as I go I’m always looking at a daily chart I know I should be willing to hold this thing for two weeks. And I’m looking at 60-minute chart I should be willing to hold this thing for three to five days. If I’m looking at a 10-minute chart I know I’m good for three to five hours. Trade Thirsty is hosting a webinar by Andrew Keene. Top Options Hack from Ex-Floor Trader. It will be Wednesday, February 3rd at 7PM EST. I will HYPERLINK you to the registration page. Good luck. Hope it helps. See you on the next video. Hubert.

Submit a Comment

Your email address will not be published. Required fields are marked *

Share:

Facebook
Twitter
LinkedIn
On Key

Related Posts