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Most reliable indicators of when to sell?

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stargazer

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Hi all

I ask this question of indicators when to sell because bugger if i can get it right. I have held after a run only to see the price plummet down etc

I also have had a run and sold on retrace just in case it would also plummet only to rebound and move higher

At the moment one of my stocks is BPT just had a strong run with it but still just under what i bought at, now is it going to go back down or continue, what should i be looking for.

Regards
SG
 
You must have bought it prior 2009

Your question is a good one and unusual as most want to know WHEN TO BUY!
Of course locking in profits and letting price run are harder than picking an entry!

You have more than one option.
Lets have a look at a few.
(1) Trailing stop.
This is what I do.
If a stock goes vertical like BPT I know that gravity is going to take hold sooner than later so I crank up my stop really close as I want to get the most I can from the vertical rise. So in BPT's case Id be looking for weakness. If Price opens ABOVE the close today and rises beyond the high of today then The close would be my stop---if it traded below the close AFTER rising above the high then Im out!

If it opens below the close/high then the Low of today is my trailing stop level.

Chances are tomorrow will be an inside day so you'll still be in the trade! Tomorrows bar will tell a lot!

Lets look at some analysis.



Firstly I think in the short term this will pause but in the longer term $1.25-1.30 is possible.
But we can see OLD RESISTANCE which has been broken.Question is will it hold-I think 2 goes will be required.



Note on this chart that BPT is nearing the end of its 5 wave cycle but isn't a full 1.00 extension of wave yet. this is the likely up side maximum in this move---you may see this tomorrow before pulling back to close below todays close---if my inside day doesn't come off!
Not the high touching the linear regression channel.

So much for BPT
The answer to your general question is best answered by suggesting you learn how to read price action which is further analysis beyond that offered up here.
Time frame is always the question

But above all

If in doubt grab your profit at weakness and have a re entry at PROVEN strength.

Will watch this one (which I'm not trading) for a while and see if we cant add to the analysis as it pans out.
 
Thanks Tech/a for your very thorough response. I afraid i don't quite understand the 5 wave cycle and those other lines you have there. I can see the resistence points. been a while though.

I have others that acted like BPT recently..HAW, LMG, FNT,HGO recently, wasn't sure when to get out and missed the opportunity and they all retraced. Whilst i bought low you still would like to take as much as you can rather than see it slip away and then wait again.

What i find confusing is the different opinions. I have read that if a stock reaches new recent highs then you shouldn't get out because it has no resistance and you could be missing a big uptrend.

The close open explanation is something i can understand.

I admit i don't use trailing stops. E trade make it sound so complicated (Conditional orders, etc) Have to do some investigating i think.

Thank you very much

cheers
SG
 
I asked a professional TA option trader the same question a while back. Here is his response.

"I would highly suggest picking up one of Tom DeMark's later books. He simply is the best there is when it comes to market timing and reversals.

I met him in NYC about a week ago too. Super nice guy especially for the level of success he has.

I received "Demark Indicators" by Bloomberg press yesterday which is written by another author. I can't recommend it yet but I would guess it is good. I will be doing a write up on the book within two weeks though.

You will want to focus on "TDCombo" and "TDSEQ" plus you will never draw a trendline the same again."

I'm more an FA guy, but found DeMark's first book The New Science of Technical Analysis full of excellent ideas.
 
moreld said:
You will want to focus on "TDCombo" and "TDSEQ" plus you will never draw a trendline the same again."
Click to expand...

The trendlines are good and generally work very well, I do not like the Combo/Seq stuff.

A short article on TD Trendlines is available on the internet, just google "TDTL.pdf".
 
stargazer said:
At the moment one of my stocks is BPT just had a strong run with it but still just under what i bought at, now is it going to go back down or continue, what should i be looking for.
Click to expand...

tech/a said:
You must have bought it prior 2009.
Click to expand...

Or yesterdays top.

This is a classic...Trend follower buying a top simply because BPT is going up, without a clue why its going up.
 
Hi all

Thank you for your constructive responses.

So cynical

I wish i had bought at yesterdays top because what i paid as tech/a indicated was alot more than yesterdays top.

Cheers
SG
 
So lets see what today shows.
Price did open above the high and traded below yesterdays close.
If It was me I would have closed the trade on the trading below the close of yesterday and placed a conditional buy at a tick above the open which would have PROVEN that the stock was still strong.
My stop would now be at the low of today.

If you were still in the trade a good trailing stop position would be at the low of today.

This wont rise vertically for ever.
There will be a pause.
Volume was above average and not wildly so indicating steady growth rather than increasing supply.
I still like the upside target of $1.25-1.30. this will take sometime yet though.
Risk mitigation is in place so we can sleep comfortably.

Click to expand

 
Hi Tech/a
Price did open above the high and traded below yesterdays close.
Click to expand...

What do you mean by this i understand opened above the high, not sure what traded below yesterdays close means. It closed today at 1.095 which was higher than yesterdays close.

Cheers
SG
 
stargazer said:
Hi Tech/a


What do you mean by this i understand opened above the high, not sure what traded below yesterdays close means. It closed today at 1.095 which was higher than yesterdays close.

Cheers
SG
Click to expand...


Hmmm.



With all due respect if you dont understand this terminology you really should not be trading!
 
Hi Tech/a

I thought thats what you meant but wanted to confirm. Seniors moment for me..lol.
Is this significant that it traded below the previous close?

Is the fact that is closed higher than the previous day make it significant to hold its strength or further enhance the chance of weakening.

Cheers
SG
 

Yes it is.
Lets study the whole bar for the day.
(1) It gapped open so buyers were rushing to buy BPT.
(2) Profit takers moved in and sold off strongly with price dropping below previous close.
(3) Buyers rushed back in at these levels after a few announcements and bought back up to a new high.

This indicates a good deal of NEW money and why I think the low of yesterday is a significant stop/trailing stop level.
Todays bar will be a pausing bar and we need to analyse it on its merits tonight with volume. Its at an extension of 1 x wave 1 so understandably pause time.

All in all acting very normally.
 
stargazer

ALK may be an interesting exercise based on what tech/a has passed on to you.

Assume that you hold, based on the chart below (yesterdays) where would you place your stop and why ?

(ignore the colours and EW stuff for now)

(click to expand)
 

Attachments

  • ALK 060411.png
    23.6 KB · Views: 32
Thank you Tech/a for the insight into interpreting the price action.

Boggo
Thanks for that suggestion great idea

This is what i can see:
the last bar opened lower than the previous close.
it traded between the low and the high from the previous bar
closed slightly higher than the previous close

Possibly some strength coming back in.

I would place my stop just a tick below the last bar.

Regards
SG
 
What I tend to do is have a look at the low of the bar prior to the most recent high and see if this is a reasonable level from both a giving back some profit and an individual stock behaviour point of view.

My stop on ALK was at 1.97, ie, one tick below the low of the bar prior to the high.

Just a quick glance at the chart and looking immediately at that point seemed to satisfy both conditions above.
Assuming that it makes a new high today then yesterdays low is the point I look at as a possible stop trigger.

My description is an oversimplification of the process but is usually my starting point and does not work all of the time.

In the cases of both ALK and BPT I think it is a reasonable reference point to start from but that is just my

(click to expand)
 

Attachments

  • ALK 070411.png
    22.3 KB · Views: 14
  • BPT 070411.png
    20.8 KB · Views: 10
OK

BPT latest update.
With more bars in play we can see pretty clearly where this is at in the near term.
The climax to $1.10 seems to be the termination for this move I would have a stop at the low of Friday.
The next 2 bars tested the high but the outside day of Friday clearly shows the weakness.


For clarity I have enclosed the Tradguider EOD chart and its commentary.

Click to expand


 
Hi Tech/a

Well done this proved to turn out like you predicted. Where do you learn to interprit those bars...

Is this based on VSA analysis.

Cheers
SG
 
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