On of my favorite chart patterns to trade is a triple top. I don't mean a triple top near all time highs, although that works too. But any time I see the price bump against a ceiling three times I get set for a breakout through those recent highs.
I have been seeing a lot of trades lately. What a difference a moveup in the averages makes. That is another valuable trading rule: Don't buy when the averages are in a downtrend!
Anyway, here is a chart of Knightsbridge tankers. I suppose the price of crude going up means their business might pick up as well...
Know when you will get out. Look at a chart and ask yourself: If I trade using charts, and if a breakout through this triple top means the price is going up, where will the price be when I am wrong. The classic answer is "somewhere in the middle of the present consolidation".....Please note that this is only good for a short term trade. Usually a day or two. We are bottom picking here if we trade for the longer term. I find it hard to hold on to these for the long haul. If I were that type of long term investor I would perhaps put on a big trade position, and then sell most of it and hold the rest for the long haul....Or add more later as the trend proved itself.
It is a gutcheck when you sell the trade and the stock just keeps going up! I remember buying Oregon Steel at $14, making a quick buck, and it didn't stop until $60....aaarrrghh!
alway limit your risk....gh
Limit your risk.
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All comments are appreciated as it will give me a chance to adjust my content to any real people who may be out there. Thank you. gh