How do I spot 'double tops or double bottoms', before they happen?
Anticipating is a double-edged sword!
You can anticipate support or resistance as the stock approaches the zone. If you're already in a trade we can use them as a profit target or stop loss.
If you're in a bullish trade then you'd have your (first) profit target below the double top resistance so you increase your chances of taking the profit. Likewise, if you're in a bearish trade you have your (first) profit target above the support of the double bottom.
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Can you elaborate on the importance of support & resistance in terms of the present & the past.
Support and resistance are important as it gives an indication of potentially how profitable the trade may be. If you have these close to your entry price or first profit targets, there is a risk that the stock will not be able to break past the ...
I was wondering once Guy checks the top and bottom of the flag how he determines at what level he decides to enter the trade? Sometimes it is 7 ticks above/below the flag other times it could be 9 or whatever.
We try to avoid being caught out by past support and resistance areas. Also we look for some clearance beyond the flag itself. It can vary according to factors such as other S&R, and whether we're near a round, decade, or century number, which we ...
Is it normal enough that after a trade is filled that it comes back into the flag (bull) and bounces along like that for quite a few days before it thinks about going back up through the original buy stop order level again?
This is something that can happen. Ideally when the stock breaks out it keeps going, takes out our first profit target and then some more on top. When the markets are breaking out big time either way, then that's how we make our best windfall ...
If you're in a trade that ends the day favourably and is in the neighbourhood of your 1st profit target, should you think about exiting the trade to ensure that you're not gapped out of it during the after-hours trading?
Yes, if you want to bag that first profit (if you're a bit nervous) then better to take it than having a restless night. Different traders have different tolerances for perceived risk and as you say, it is a swings and roundabouts game. However, if ...
You mention about Profit Target of a 1:1, then for actual trading you taking a 1: less than ½ ratio. Therefore, it is more risk than reward ratio, How do you justify this of being conservative, won’t I be bankrupt too soon?
This is a common fallacy. Just because a trade seems to be imbalanced as to risk/reward, that's not actually the important thing - it just sounds good in marketing material and in seminars. But what does it actually mean? Nothing! The key is what ...