In today's volatile markets, the old
"buy and hold" routine for trading
stocks has given way to different
trading strategies, like those detailed
below .....

:) _ :) _ :) _ :) _ :)

Hi folks,

Some traders have trouble determining just
WHEN to exit their trades .....

At the end of the day, the exit is the most
important part of any trade, as is it
determines our overall profit for that trade.

Many traders fail, using a trend-following
strategy, simply because they do not know
how to judge when the trend is over.

Trend-following is fine for "investors" or
those who like pain in big doses ..... :)

However, some traders do a little further
analysis and choose a strategy, that
determines their profit, before they ENTER
the trade ..... that is, they have a WRITTEN
trading plan of the trade, including entry,
exit, stop and defined risk, BEFORE entry.

That may sound complex, but really it soon
becomes second nature, if you are happy to
take pre-determined chunks out of the
anticipated market move.

There's many strategies to determine such
targets, but Gann gave us a very simple
strategy that works repeatedly in many
markets ..... and many will recognise it
as the 50% retracement rule, often dressed
up in trading courses, as the holy grail of
trading.

Most use it, only on the price scale of their
charts, but if we use it on the TIME scale
as well, it becomes a very handy tool to
determine trade exits .....

Here's a simple trade on AOE we exited on
18082004, having entered around the June
equinox ..... see previous AOE alert,
posted on this forum.

In the chart, you will notice that AOE
made a high on 17022004 at 38, then
drifted down for exactly 4 months to post
a low about 20 on 17062004.

With the low confirmed by the long magenta
time cycle, we figure our time target for
the retracement will be half of the time
it took for the down trend ..... that made
our target date 17082004 and our price
target half of the range down = 9 + 20 = 29.

A day before our target date, the price was
turned back by obvious, previous resistance
at 33, having overshot our target price by
4 cents ..... that's good for us.

Click on link below for updated AOE chart:
http://www.ttrader.com/mycharts/display.php?p=25701&u=yogi_in_oz&a=Starcode%20Traders&id=674

-----

As per the plan, we exited the trade at our
planned TIME target, on 18082004.

Today, AOE made a double top at 33 and a doji
candle, indicating indecision in the market.

As the price is ahead of time by a few points,
it would not be surprising to see it pull back
a little over the next few trading days, as tops
tend to roll over slowly ... waiting for traders
to bail out.

Of course, markets being fickle monsters, they
can just as easily keep the trend going up ...
..... and that's fine too, because we executed
our trade as planned, giving us more confidence
in our trading tools and strategies.

..... a plan that told us, WHEN the exit would
be, even before we took the trade.

-----

Happy with over 45% return on investment, in about
2 months, we can turn our attention to the next
trade, which is showing less market indecision,
right now.

-----

Trading to PRICE and TIME targets is not for
everybody, but it definitely takes the uncertainty
out of where and when our exits will be made.

happy trading all

yogi

http://easy trading-tools.00cd.com

:) _ :) _ :) _ :) _ :)

======