Knowing When to Take Money Off the Table (Part 4)
07/10/2008 12:00 am EST
Note that I measured just how far price stopped above the down-sloping red Median Line on its second test of the up-sloping blue Lower Median Line Parallel—the area where I want to get long.
Then I transferred that same distance above the red down-sloping Upper Median Line Parallel. I added in red Sliding Parallels at both areas to make the measurement easy for you to see.
And now, right in front of me, is a new Energy Point that SHOULD act as a price attractor. It’s the area where two Lines of Opposing Force meet: The red down-sloping Upper Sliding Parallel I just added in and the blue up-sloping Median Line.
Are there any other clues?
Looking to the left, I notice that there is already a significant Swing High at the same area—and so I simply add in a horizontal blue line to mark the potential ‘Double Tops’ that might form IF price gets attracted to this area and runs out of energy.
You can see I have diagrammed my limit buy order, my initial stop loss order and now I have added my profit order at 114 06/32, at the Energy Point.
Now that I have settled on a profit target, I enter my limit buy order and my initial stop loss order. I can’t place a profit order until I have a position! Let’s see if the markets let me in…
More tomorrow in part five.