"Quickly cut your losers and let the winners ride!" We've all heard the mantra, but this is a very important quality of a successful trader must maintain. Your best trades will be the ones that defy market gravity and go on an insanely improbable run. Here, TSLA is the perfect example. After drastically missing earnings on Feb 10th, sentiment was as bearish as I'd ever seen it among this company. How does the stock respond? It holds the ever-important long term support at $140, and goes on an absolutely FEASTY 100 point run in the next 5 weeks. It is of the utmost importance to figure out the correct way to trail a winner in order to get the most out of the trade. Here, it seems TSLA has been riding the 8 day moving average the whole way up. You can see whenever it has come close to the moving average, a ferocious move higher follows.
One of the many different lessons you will find with the Trading Experts is how to find the correct trail for your trade in order to get the most out of it, while also taking profit at an opportune time. After this exercise we will move onto learning more about the “Art of the Trail”. In the meantime, I would like you to pull up the Nasdaq 100 or S&P 500 or any other component and find 5 stocks that went on Ludicrous mode. What do we mean by Ludicrous mode? - A stock that is on an upward trend usually at around a 45% angle, it continued to trend higher without any nasty shake outs. We will give you a hint: Amazon after March 21st 2016!
Do you have balls?
In the Chart Reading Group chat post the Amazon hint we gave you, or if you really have balls find your own Ludicrous mode trade where trailing the MA would have kept you in for quite some time.
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