- Short-term traders would use MACD as a guide for change in trend direction. Buy signals when the MACD crosses above signal line, sell signals when MACD crosses below signal line.
- Using stoch indicator, sell when stoch goes above 80 indicating an overbought condition
- Spotting price gap that is significantly lower accompanied by high trading volume (spelling trouble ahead)
- Setting a target price for minimizing loses can be done with a few methods using stock charts:
- Simply setting a stop loss at 10% loss from current price or adopt the trailing stop-loss strategy as your stock price goes up
- Exit if the stock price falls back below the resistance level after breaking through resistance - which gives smaller financial risk but prone to whipsaws (getting out of a potentially winning trade too soon)
- Exit if the price falls below the mid-point of the trading range - gives a higher risk but less prone to whipsaws
***
Comments
Post a Comment