Exit strategy (income signal)

Swing trade exit
The first step after you enter the market is to place your stop loss 2 ticks below the low of the entry bar.

The second step is to leave the market work for 5 trading days. Do not move your stop loss level or set any profit targets for the initial week of the trade. Avoid the Urge To Do Anything For 1 Week Or 5 Trading Days. You can apply this method to day trading, switch each trading day for each trading bar. 

After the position has been entered and had 5 trading days to work, we start counting back 10 day lows each trading day. When the market makes a 10 day low, we will exit the market. Watch how this method keeps you in a trending market.

The 10 Day Breakout Exit Strategy Is Designed To Keep You in A Strong Market That Has Continued Momentum

If the stock didn’t come down so much, the method would have kept me in a bit longer. This happens often with Stocks or other markets that are trending very strongly and retrace only for a few days at a time. I once thought about a short term trade that kept in for 6 months because the market didn’t want to retrace far enough to trigger my stop. This exit strategy works well with breakouts and other entry methods that are known to produce volatility. One of the first technical analysis basics is to pick stocks and other markets that have good liquidity and volatility. Always Place Your Stop Loss Level at The Time You Place Your Order Remember once you are filled, you do not rely on this strategy for the first 5 days or the first week of trading. You rely on your initial stop loss level at this time. Many times beginners get confused about when they should start looking for the 10 day low. You should start on the 6th day after you enter your trade. A Strong Trending Market Doesn’t Pull Back Much Notice how the strong trend keeps the stock from making a 10 day trading low. I picked this example specifically because I wanted to demonstrate how a very short term trade can turn into a long term trade. If this happens that’s great, because it will make you follow the first principle of profitable trading, cut your losers and ride your winners. That’s it for today’s tutorial, during the next few weeks I will go over a few more exit strategies including how and when to take partial exits.