How do you know when to take profits?

One issue new traders will have is when do you take some profits? How do you know when to close a trade?

For me I put positions on in share blocks and I like to take them off in the same order. If you look at the chart below of #CSX you will see a perfect chart. Each buy signal moved into profit then price stalled. The indicators TSI, MACD, RSI and ADX all signaled together over bought…that was your clue to take some money off the table. Lock in that profit.

Then notice each time price moved sideways, worked off the overbought in the indicators then took off again, signaling new buy signals. You can easily put money back on. You don’t have to go all in or all out.

The moving averages and indicators work together to give you a clear picture of what is happening and what is the logical course of action. I am up over 100% in #CSX  since last September. On three different occasions I have sold shares than added shares back. This is why I call my trading system The Money Flow. Money flows in money flows out. You want to stay in the flow. I don’t try to guess or predict.

Why are train stocks moving up? I don’t care. The moving averages and indicators tell me exactly what to do each day. Today I will lock in some profits. Ordinarily because price is still above the 5 ema I would hold off, but notice today price went right to previous high…resistance…and turned around. That is your signal that right now the bulls are losing steam. You can read more about this in The Money Flow Trading System ebook.

21017csx

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s