LIMITS FOR PROFIT
To me, exiting a trade for profit is basically the same as exiting for loss. I strive to simply do what my charts tell me to. As soon as things change for my trade, I look for opportunities to profit.
1. Momentum changes: Exit your trade when the 5/8 crosses against you. This is a quick exit for short-term trades.
2. Speed changes: Exit your trade when the 21/55 crosses again you. This happens less frequently and is therefore more appropriate for medium-term trades.
The benefit from either strategy is that you are not in the driver’s seat. You simply stay in your profitable trade until the moving averages cross against you. They are a little slow and you will always leave a few pips on the table. You’ll never get out at the exact top or bottom. But you will certainly catch the bulk of the move.
If in fact, you often stay in the trade a little longer than you may have planned on, you may have left a few pips on the table, but you probably still made more than if you reacted emotionally.
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