Initial Stop

For every entry, there is an exit.

Upon entry, our first exit is called the Initial Stop.

When the Stock Price hits this Initial Stop, the basis for our trade is gone.

There are many ways to define the Exit Price. Some possible methods are:
• Set the stop to the lowest low of the past 7 days
• Set the stop at the 20 day moving average
• Set the stop to two times the ATR value, etc.

Using the Super Swing Template (V Price Pattern) formation as our confirmation signal, we use the Lowest Low of the V as our Initial Stop.

 The logic: if the V Pattern is based on this lowest price, and this lowest price is hit again, then the V is not valid anymore. It is time to get out.

So let’s say on April 15, the lowest point on the V is $ 144.54 When the price goes lower than $144.54 in the next few days, we will exit our position.

However, what if the Stock Price Movement floats up in the next few days? Is it possible to trail the stops so that we can lock in our profits systematically? This can be done using Trailing Stops ...

Next: Trailling Stops ...