| If ever or whenever you are making a trade the | | | | levels forward in the future , directing targets is not |
| question quickly rears its head : How and when do | | | | hard to finish. The simplest technique is to {use your |
| you leave with a profit? Pointing targets has to be | | | | higher time-period support} and resistance levels ( |
| one of the most important elements of your | | | | this should commonly be one time-period higher than |
| trading strategy , and this is the subject of the next | | | | your trading time-period), and to set your target at |
| article in our series Technical Analysis Explained. | | | | the coming logical assist or resistance level over the |
| Objects can be based on time (I'll keep doing the | | | | current price. |
| trade for 3-week) or found on technically (I'll keep | | | | Technical analysis explained as follows: Suppose you |
| doing the trade until my slow moving average | | | | are day-trading the S&P E-mini contract. You |
| across my faster moving average) or | | | | are using a five minutes chart and take a position |
| profit-based (I'll leave when I have an open profit of | | | | using your favorite entry system . The market starts |
| 1000usd ), or price-based (I'll stop of the trade | | | | to work in your favor and since you have put on a |
| when it reaches my target price .) | | | | position with five contracts you quickly accumulate a |
| Of the three methods each of them has some gains | | | | profit of $750 . You feel happy and turn a bit |
| and losses. Technical exits are always available and | | | | greedy and that makes you want to take profits |
| remove the element of private opinion , but work | | | | quickly , especially as you see in eyes a slight |
| well only in powerful trends, cause losses in | | | | retracement in the five minutes chart. But, |
| congestion , and almost all the time leave a number | | | | understanding that market structure is all the time at |
| of money upon the table . Time-based tools are | | | | play, you step backward for a period and view the |
| helpful at times but just mostly are net losers, and so | | | | everyday and weekly charts. On your Drummond |
| cannot be seriously taken as a single implement. | | | | Geometry charts you can view quickly that your |
| Found on profit exits can teach a trader to make | | | | entry was next to daily and weekly support , in the |
| frequent profits but what happens when the trade | | | | end of the daily envelope and close to the weekly |
| keeps going far above your pre-determined exit | | | | envelope bottom too. You can see that the logical |
| point ? This violates the easiest rule of trading: let | | | | target of this initial move is at the daily PLDot some |
| your winners run . | | | | nine full points away, and that the advancement of |
| The greatest means of leaving is to decide price | | | | the five minutes bar with its slight retracement is |
| targets but only when these are soundly set up in | | | | entirely normal and consistent with the thought that |
| the market structure and point the market's existing | | | | the market has {further upside}. You set a price |
| support and {resistance matrix}. If your plan of | | | | target at the daily resistance and set an alert to |
| trading {takes into account} the natural support and | | | | sound when that is filled , so that you are able to |
| opposition of the market then the target of yours | | | | make money there. You can then further assess if |
| will be sound and your chances of remove everything | | | | the market will reverse and step back to the first |
| that the market offers is even more higher then with | | | | assist level or pause and continue to higher level of |
| arbitrarily chosen, fixed-dollar profit targets (which | | | | resistance. |
| tend to be emotionally driven ) or a technical | | | | One of the main points is that when researching |
| moving average tool (which by defined obliged to | | | | market structure as opposed to arbitrary dollar value |
| leave huge amount of money upon the desk). | | | | price aims you mostly have a handle on what the |
| How are you going to set profit targets according to | | | | market is doing . As a technical analysis explained |
| market structure instead of an arbitrary dollar | | | | course teaches, full control taken by you since you |
| objectives? For somebody it is not an easy | | | | know the structural objective at all times as the |
| question but for the trader who has built an | | | | market flows between its higher time- period support |
| understanding of multiple time period structure and | | | | and resistance levels. |
| the ability to project the support now and resistance | | | | |