Here’s One Way To Prevent Taking A Profit Too Soon
New daytraders tend to
stare at the charts excessively especially after opening positions.
They often forget to see bigger pictures and take profits too soon. How can we
prevent this? Let’s look at one example.
10:29:48
(From TradingMarkets TradersWire)
Lincare Holdings (LNCR)
is forming a bear flag just below the declining 15-period SMA (3-min). LNCR is
down 48 cents at 29.27. Â
Around 11:18 A.M., LNCR closed slightly above the
declining 15-period SMA. Some traders might have covered the position and took a
profit. But as you can see, the 13-minute chart (bigger time frame) was clearly
trending down. You could have waited till 12:20 P.M. to exit the trade when the
stock closed above the 5-period SMA.
It may not be easy for new traders to look at different time frame charts, but
it can improve your trading skills.
Have a good day.
If you have questions, feel free to mail them to me.
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