Hi…
How are you?
Its been long time not communicate with you.
I was distracted with other method and spent some time to tried it. After sometime, its made me frustrated and stress. I take abreak for awhile to review back what i did.
After sometime of review, i reliaze that i need to throw all garbage in my head and start from scratch by following a system that less stree and frustrated.
I back to you method and want to study deep about your system. I think its enough to brag about my situation in here.
Im writing this email just to ask about taking profit in trending situation.
How to take profit when market in trend?
If market in range its easier to know profit target but not in trending.
Thank you in advance for your answer.
Regards,
My Response:
It’s quite the challenge to unlearn the old, isn’t it?
Makes moving forward… a bit tricky.
Now, about taking profits in a trend: You should consider it when the market makes a new low or high through a price spike.
Spotting a Potential Reversal: The “Spike and Bounce” Signal
To break it down…
You’re in a downtrend, and the market keeps pushing lower, creating a fresh new low. Suddenly, it plunges even further in a sharp spike, only to bounce back up quickly. This “spike and bounce” pattern could be your cue to take some profits off.
Why is this significant?
This price action suggests a potential shift in the market’s dynamics.
Here’s what might be happening:
- Banks Reversing the Market: The sharp spike down could represent banks strategically placing buy orders to trigger a reversal. They’re essentially buying at a discount, anticipating an upward move.
- Banks Taking Profits: Alternatively, the spike could be a result of banks taking profits on their existing short positions. This selling pressure can momentarily push the price lower, but once their profit-taking is complete, the market might rebound.
In both scenarios, the subsequent bounce indicates buyers are stepping in, potentially leading to a significant retracement or even a complete reversal of the downtrend.
Seeing a “spike and bounce” pattern at a new low in a downtrend can be a warning signal to consider taking some profits off the table. It’s a sign market sentiment might be shifting, and it’s wise to secure some gains before a reversal begins.
Remember: No signal is foolproof!
Always check for additional confirmation before taking profits.
- Supply/Demand Zones: Is the spike and bounce occurring near a key supply or demand level?
- Technical Indicators: Are indicators, such as the MACD or RSI, showing divergence?
- Price Action: Is the overall price action suggesting a change in momentum or trend?
The Power of a Well-Defined Plan:
Combining the “spike and bounce” signal with a solid trading plan and effective risk management strategies can significantly improve your chances of success.
A well-defined plan will help you:
- Identify clear entry and exit points.
- Set appropriate stop-loss and take-profit levels.
- Manage your emotions and avoid impulsive decisions.
Don’t Forget: Place your stop above the last consolidation or retracement, as that’s the most recent point where banks could have executed a large number of trades,
I hope this helps…
Enjoy your Sunday and keep the questions coming!
PAN.