For Swing Trades (Long and Short), it's not difficult to duplicate my results. That's because the rules for entering and exiting a Swing Trade leave little room for guess work...A Swing Trade is defined as a trip from Gathering Support to Gathering Resistance or vice versa.
For Day Trades (Long and Short), the rules for exiting are not as clear cut as are those for exiting a Swing Trade.
One approach that I use relies on the "20-Period Moving Average" and the "50-Period Moving Average" on a 5-Minute Chart.
For example, if a Day Trade Long is ventured at an area of Gathering Support and the price then rises to find Resistance at one of the two Moving Averages, it is often a good time to close the trade.
Tuesday's price action in the QQQQ provided 4 separate opportunities to venture a Day Trade Long at an area of Gathering Support between $37.30 and $37.39 (represented by the area in light blue on the 5-Minute Chart below).
The first Day Trade Long was entered when the QQQQ fell to within Tuesday's area of Gathering Support by printing a low of $37.31. Support was found. The QQQQ rose 49 cents to a subsequent high of $37.80.
$37.80 placed the QQQQ at Resistance at its declining "50-Period Moving Average" where, based also on the MACD Indicator, the trade was closed. (One little know trading rule states that a stock rarely rises beyond its "50-Period Moving Average" when its MACD is below the "0" Line. At the time that the QQQQ was bumping up against Resistance at its "50-Period Moving Average", its MACD was far from the "0" Line.)
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