A correction is a reverse movement, usually negative, of at least 10% in a stock, bond, commodity or index to adjust for an overvaluation. Corrections are generally temporary price declines interrupting an uptrend in the market or an asset.
DEFINITION of ‘Uptrend‘ Describes the price movement of a financial asset when the overall direction is upward. A formal uptrend is when each successive peak and trough is higher than the ones found earlier in the trend.
Position Entry is the timing for an investor or trader to position they buying point onto a stock while pending for it’s price action and volume to take place riding the continuous trend.
WHEN an investor or trader decides to position into a particular stock, he/she must prepare at 1) what price range is the entry pricing zone, 2) shall price reacts the opposite at what price range is the stop loss pricing zone, 3) as profits starts building up when to take profits.
When you trade the market without having a Trading Plan, you are just blindly gambling your money off in the market. Risks are no doubt part of every trades at the moment you click ‘buy’ or ‘sell’. It is rather a question of how are you going to manage the risks on every trades you are about to click into.
1) what price range is the entry pricing zone?
- Buying is always simple but what is important is knowing the ranging of price for you to make the entry.
2) Shall price reacts the opposite at what price range is the stop loss pricing zone?
- Selling is the hardest job of all just like sales job ain’t easy for everybody at the start. The moment you place your entry price into the market, you must know at what price range will serve as a stop loss pricing zone to you. Stop loss means when the price drops to a certain price, at that price is where you have decided to sell to protect your capital while risking to lose that much % of your capital. This is the time you should bear in mind that you have no love hate relationship with this trade but to execute as per planned before hand.
3) As profits starts building up when to take profits?
- You’ve clicked on the ‘buy’ button placing your entry price into the market. Price goes north putting a smile on your face. Shall price heads south, you know at what price you will execute your stop loss to protect your capital. Now when to take profits? This is where you should beforehand calculate your target profits range on your trade. As the price hits these range of target profits = sell to realize your profits and that’s a handsome trade you’ve pocketed into your records!
“Easier said than done being common. Self discipline is an act of practice in the long run if you want to thrive in anything!”
As posted on the February 12, 2018 on the outlook of Metal, Steel, & Aluminium stocks for Year 2018, were rather at a stage of testing their progressive rebound. Shall the progressive rebound succeeded it will be followed by a break out rally movement.
As of 25th February 2018, majority hit the progressive rebound point and started to retrace back.
To put it in a clear cut scenario, please click back on the February 12, 2018 post and look at the “Stop Loss” set on all the stocks. At any point and day the price breaks below the stop loss = clear cut message to sell and protect your capital, as this level of stop loss will highly bring these stocks into a Long Term Downtrend price movement.
Henceforth next week will be an interesting week to observe the performance on these stocks. Shall there be no violation of their “stop loss” point, will mean price are back into their “progressive rebound” mode again and followed by shall their price can sustain above the progressive rebound point = break out rally movement.
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