Saturday, October 12, 2019

Weekend Stock Charts Absorption

Some simple thoughts :

look at the overall trend, using 150 and 200 SMA
look for those sloping up or downwards
nevermind about those that are more straight

next, is there a retracement?
like upward trend, but price is going downwards to hit 150 or 200 SMA
or hitting resistant/support line
these are the opportunities

set stop loss slightly away from 150 or 200 SMA
allowing for some buffer
try to aim for smaller gap between current price and stop loss
so that win-loss ratio is higher

so when to take the win?
use resistant/support line
set limit slightly below resistance line. vice versa

win-loss ratio should not be less than 1
in other words, if you risk 100, your potential win have to be more than that

if ever you feel lost when trading, just remember the main logic:
you just want to ride on the trend, by entering when there is a retracement

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