One of the most important things in trading is sticking to your plan…
Your plan should include a specific exit strategy with a goal that could be a set dollar amount, a per-share amount, a percentage, or a technical indicator.
And it should include a stop loss if the trade doesn’t work or goes against you shortly after you enter.
But sometimes your emotions can get the better of you…
Or the market will throw something unexpected at you and you have to think fast!
You don’t have time to sit around and wonder what to do … You have to know how to react.
So here are three things that can come up while you’re in a trade that can signal that it’s time to exit your trade — even if your goal or stop hasn’t been hit…
When to Exit Your Position Even If You Don’t Want To
It’s time to get prepared to take on anything the market throws at you … Or anything you throw at yourself.
Knowing how to deal with unexpected events can help you avoid turning a winner into a loser — so let’s dive in…
Taking Gains and Avoiding Greed
Traders constantly have to battle the emotions of fear and greed.
Fear will have you wanting to sell a position before your stop is hit.
And when a trade starts going your way, it’s easy to get greedy. You might want more and more profits as you watch the stock climb higher…
But when you have a realistic goal for your trade and it gets hit, stick to your plan and exit the trade.
Even if the stock continues to rise after you exit, it’s better to secure your profits and avoid losing them in a sudden pullback.
Greed can easily turn a winning trade into a loser.
And when you feel greed taking over when you have a winning trade — exit the trade even if you don’t want to.
Don’t Fall for the Snooze Fest
In volatile, low-float stocks moves can happen quickly…
But sometimes when those volatile moves are over, you can get caught in boring sideways price action…
And sideways price action with decreasing volume can be a danger sign.
Remember that these stocks are typically for day trading, not long-term holding.
When the stock has had its major move and is now trading flat with no momentum, it’s time to exit and look for new opportunities.
Negative News Hits The Stock or Overall Market
Stocks can have wild swings in reaction to news.
We love trading stocks with positive catalysts because they can have lots of upside momentum.
But the opposite can happen when negative news hits…
Negative macro or sector news can have ripple effects that can cause stocks to tank.
That’s why having tools like the Breaking News Chat is crucial.
The Breaking News Chat bros send out real-time news alerts that have the potential to move stocks.
And when negative news hits the stock you’re in, or even the overall market or sector — it’s a good time to exit your trade.
Be ready to react fast when greed, low-volume consolidation, or bad news hits your trade.
Remember, trading is about discipline and recognizing when it’s time to move on to the next opportunity.
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Have a great day everyone. See you back here tomorrow.
Lead Trainer, StocksToTrade