Wait For A New Clear Signal

April 19, 2010 by  

On Friday we saw significant profit taking after 6 weeks of  stair stepping higher trading. Many strong companies were affected.

Although the sell-off appears to be related to the latest financial news, bear in mind that we expected some profit taking after recent days of buying and prolonged overbought indicators.

It is easy to be overcome by emotions and give in to the temptation  of jumping onto  the moving train not knowing when the train is losing steam and the ride is over.

This is a  time to protect profits on existing trades with trailing stops and wait for new clear entry signals based upon a sound trading plan.

This week we will watch and see whether there will be more profit taking and then resuming of our upward course. We will also watch for signs of change.  It is best to wait before  entering  any new trades until we have a clear direction and new entry triggers. As always, our strong watch list will generate new profitable trades.

Comments

Feel free to leave a comment...
and oh, if you want a pic to show with your comment, go get a gravatar!