No doubt this has been discussed throughout various threads many times, but I couldn't find an all encompassing thread on this particular topic.
This is a discussion about whether you estimate the magnitude of a move, what methods you use and how this impacts your trade management/exits.
For me, I don't like to have a preconceived idea of when I will exit a trade. I simply trail my stop and don't try to guess which ones will be shorter moves and which ones will be home runs. I focus my attention on risk management and the defensive side of the trade to ensure that I don't give back big profits. For me, the main form of anticipating how far price may move is strong support and resistance levels where I trail my stop tighter in higher risk areas like these but I don't sell at a target.
So some of the methods others might use are:
- Simple support/resistance/high volume areas
- Measured moves (e.g. the height of the range in measuring how far price will go after breakout)
- Elliott Wave
- Wyckoff point and figure charts for prediction.
Feel free to include anything I have missed and I'm interested to hear how others go about it.