One of the most controversial issues about investment and/or trading is the topic of knowing a profit/price targets. In a way, it is about seeing into the future and deciding that is the end goal, for some.
By using the support and resistance lines , we can better guide ourselves towards this goal. Like in the Soybean Chart, we can see that there were two price points - 26/2/18 and 06/06/16 peaks. Those investors who had bought at the high price back then would be waiting impatiently to get rid of this commodity asap. Thus, we can see a healthy correction at 1078 price level where it is also the resistance level.
Then, it surpassed that level and prices continue to go higher. Now, at 1201, we are again facing the peak last visited at 06/06/16. Now, that is 4 over years ago. Those investors who are still holding this are bleeding in their accounts for so long and are dying to get out soonest possible.
For that, we see the last 2 red candles, which means some selling action. Apart from those who bought at high and awaiting to sell , there are of course, the opportunistic short term short sellers who take advantage of price actions and trade it for a quick profits.
So, like a see saw, the heavier side will win. If enough bulls over the next few days/weeks continue to support the price, then , we can see a bullish continuation pattern where it breaks above the resistance level at 1201.
Now, every chart is different and so the sector that it is IN. This is crucial ! For example, we are now witnessing a sector rotation where certain tech stocks are going through a correction (Netflix, FB, Apple, Amazon, etc) and Banks and Energy stocks are basking in the sun and putting on a big smile to the bull traders/investors !
For stocks, I generally do not sell , that is no plans to EXIT the business UNLESS it has fundamentally change its nature of business, suffers badly in terms of numbers, etc .
For commodities, currencies, indices , cryptocurrencies, etc, I do have short and mid terms position in them.
On profits and profit targets - this is how I look at it . It is important to know when to sell and once the profits is in your pocket, that is when you truly knows you have made it, never mind the monetary amount. Use some of it to reward yourself.
Look at the price points in the chart as a NEVER ENDING ROPE. The knots at the ropes are your resting points or take profits zone. Once you took the profits, you assess where the rope is heading , is it up, sideway or down. You decide what strategy to use to climb the next journey and plan where is the next knot/profits zone.
Of course, you may not reach all knots that you think you have set out to achieve. Sometimes, before you reach it, you slipped and fall a few steps (similar to price pull back and evaporates all your profits) OR you were distracted while climbing and decided to jump ship to the next rope adventure (from one position to the next by closing the first position). Again, it is hard to say if this is right or wrong as everyone assess the market differently and we need to respect that.
Sometimes, you are in the wrong boat and it is wiser to take a short term pain to end it by bailing out rather than to ride it to the wrong destination. If you hope it will detour and bring you to where you wanna go, you may be in for a surprise.
I wanted to write this from my personal experience as I get comments or PMs from followers asking me on this or that stocks where is the profit targets?
The fears come when you start to chase high price and then you have no ideas where to exit , fearing it might reverse sooner than expected. That is why the trend lines, supports and resistance, price action , all combined helps me to reach a decision.
I hope this is helpful to some of you out there. Again, I may not be able to reply to your questions/comments/Pms immediately so I appreciate your patience and understanding.
By using the support and resistance lines , we can better guide ourselves towards this goal. Like in the Soybean Chart, we can see that there were two price points - 26/2/18 and 06/06/16 peaks. Those investors who had bought at the high price back then would be waiting impatiently to get rid of this commodity asap. Thus, we can see a healthy correction at 1078 price level where it is also the resistance level.
Then, it surpassed that level and prices continue to go higher. Now, at 1201, we are again facing the peak last visited at 06/06/16. Now, that is 4 over years ago. Those investors who are still holding this are bleeding in their accounts for so long and are dying to get out soonest possible.
For that, we see the last 2 red candles, which means some selling action. Apart from those who bought at high and awaiting to sell , there are of course, the opportunistic short term short sellers who take advantage of price actions and trade it for a quick profits.
So, like a see saw, the heavier side will win. If enough bulls over the next few days/weeks continue to support the price, then , we can see a bullish continuation pattern where it breaks above the resistance level at 1201.
Now, every chart is different and so the sector that it is IN. This is crucial ! For example, we are now witnessing a sector rotation where certain tech stocks are going through a correction (Netflix, FB, Apple, Amazon, etc) and Banks and Energy stocks are basking in the sun and putting on a big smile to the bull traders/investors !
For stocks, I generally do not sell , that is no plans to EXIT the business UNLESS it has fundamentally change its nature of business, suffers badly in terms of numbers, etc .
For commodities, currencies, indices , cryptocurrencies, etc, I do have short and mid terms position in them.
On profits and profit targets - this is how I look at it . It is important to know when to sell and once the profits is in your pocket, that is when you truly knows you have made it, never mind the monetary amount. Use some of it to reward yourself.
Look at the price points in the chart as a NEVER ENDING ROPE. The knots at the ropes are your resting points or take profits zone. Once you took the profits, you assess where the rope is heading , is it up, sideway or down. You decide what strategy to use to climb the next journey and plan where is the next knot/profits zone.
Of course, you may not reach all knots that you think you have set out to achieve. Sometimes, before you reach it, you slipped and fall a few steps (similar to price pull back and evaporates all your profits) OR you were distracted while climbing and decided to jump ship to the next rope adventure (from one position to the next by closing the first position). Again, it is hard to say if this is right or wrong as everyone assess the market differently and we need to respect that.
Sometimes, you are in the wrong boat and it is wiser to take a short term pain to end it by bailing out rather than to ride it to the wrong destination. If you hope it will detour and bring you to where you wanna go, you may be in for a surprise.
I wanted to write this from my personal experience as I get comments or PMs from followers asking me on this or that stocks where is the profit targets?
The fears come when you start to chase high price and then you have no ideas where to exit , fearing it might reverse sooner than expected. That is why the trend lines, supports and resistance, price action , all combined helps me to reach a decision.
I hope this is helpful to some of you out there. Again, I may not be able to reply to your questions/comments/Pms immediately so I appreciate your patience and understanding.
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added more last night
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Praise the Lord. Congrats to those who followed.
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Praise the Mighty Lord for he always keep his promises to his people. Halleujah !!