Hi everyone
In an uptrend with pullbacks ( e.g healthy trend) , from your experience, is it better to buy on the bounce off a trend line( on the swing low) or is ti better to enter on the previous higher high.
Also do you ride the trend and move stop loss or you exit on the next swing high ?
That is one element but you have to have higher time analysis and some price action. You move your stop loss in line with your trading plan.
I enter on the breach of a lower high, assuming the trend remains in place and this only printed as a part of a pull-back. Some people insist they would only enter on the breach of the second successive lower high, some say even the third such.
I hate buying at a previous higher high, though I sometimes have take a swing at it and it sometimes works. But a chart feature like this doesn’t immediately point to a stop-loss position.
My game-plan for trends is to close half the position when profit equals the initial risk, to let the other half run with the original stop-loss unchanged but to keep adding new trades as further pull-backs occur.
Why not do both? If your plan is to acquire 100 shares of ABC, buy 50 on the pullback and if it keeps moving higher, buy another 50 on the breakout?
Thank you all!
This is good advice. I have reviewed my charts this am and found a couple of situations where I want to add to trend-following positions and identified some break-out levels to do it - the new orders are set…
Not enough new traders out there think differently. They view it as all or nothing and don’t understand that the single key to being a professional is reducing cost basis- straight up.