Tuesday, September 13, 2011

Trendlines overhead

We have trendlines all over the place just above current market levels. Trendlines are made to be broken.

Stops which are placed above trendlines are scooped and breakouts or reversals occur. There is no telling which way security will go after trendline is broken. Backtests are very common. In some instances, if breakout is strong, there will be a follow-through without any backtest. In others reversal will take place.

I am not a big fan of guessing. My action at trendline is to take profits, leave a runner, and trail my stop. I am either right or very right in that scenario.

Good luck with your trading!

No comments:

Post a Comment