I was trying to come up with something that could be helpful in many ways.
Sometimes when I suggest a trade long or short, I get several emails or comments such as :
- Where should I place the stop ?
- Where should I take my profit ?
- How long do you give this trade a chance of becoming successful ?
- What is the price entry point ?
I've come up with a simple way that should answer all these questions within one chart.
When it's a suggestion for going long on Citigroup in this instance:
The rectangle will be blue .
You have an entry point which is the actual price at the exact time I post the chart. It's $37.74.
You have a stop level at the bottom of the rectangle at $36.80.
You have an exit level to bank in the profits. In this instance it's $40.
The time frame is shown by the width of the rectangle. In this instance it's one month.
When it's a suggestion for going short on Newmont Mining in this instance:
The rectangle will be red .
You have an entry point which is the actual price at the exact time I post the chart. It's $58.90.
You have a stop level at the top of the rectangle at $59.
You have an exit level to bank in the profits. In this instance it's $55.
The time frame is shown by the width of the rectangle. In this instance it's two weeks.
