trader asked:
I use technical analysis to buy and sell stocks. The rules are entered into a computer prorgam, back tested and optimized to find the highest possible netgains. What are the 3 most important parameters you use to determine when to sell?
I use technical analysis to buy and sell stocks. The rules are entered into a computer prorgam, back tested and optimized to find the highest possible netgains. What are the 3 most important parameters you use to determine when to sell?
{ 4 comments… read them below or add one }
If you’re talking about selling short, I don’t do that. If you’re talking about taking a profit (or limiting your losses), there is only one: my stoploss. Whether to buy back in after being stopped out is another matter, but it’s not what you asked.
I will suggest that you create your own exit strategy as each trader will have different risks appetite. What suits me may not suit you.
Normally, I will backtested the data with at least 1 full cycle of bull and bear market. The result will enable me to determine the highest probability to make an entry points and exit points. I will obey what the signal. When it is time to enter, I will do so. When it is time to exit, I will do so. I will not care about what is my highest possible gain and takes what the market give me.
1) Market direction: I trade small cap breakouts many of which top out at the same time when the market flashes multiple distribution days. For example, this time around many small caps started breaking down around July 23-25. I held until then and sold around that time.
2) Trendline penetration.
3) S.t. lower low.
EMA para SAR & stockistics
install aptistock
more on my blog