Of course, you can do the exact opposite of this with a successful short trade, using the lower bound of the resistance channel instead. Therefore, you can set your higher profit-taking sell order a little bit under the upper bound of the resistance channel and reasonably expect that the price will touch that target at some point in the near future and close out your trade in the best possible position. Now if the trend maintains the same general momentum and volatility, the price is unlikely to breach the upper bound of your resistance channel. Your resistance channel is set by taking the last few highs and lows of the price trend to set two resistance lines, one for the highs of the trend and one for its lows. Resistance Channel Upper BoundĪssuming that your successful trade is a buy, you want to use the upper bound of your resistance channel as a guide for your higher profit-taking sell order.
Warrior trading how to#
Let’s briefly examine how to use technical analysis to manage your profit targets when swing trading. While this may sound a little complicated at first, it is all actually very straightforward, and you will be surprised at how quickly it becomes an ingrained habit of effective profit-taking. Profit-taking strategies in swing trading use technical analysis to gauge the likely upcoming highs and lows of a security’s price action in the next few days, and then sets orders that balance the the risk between a safe close on existing profits and the potential for an increasingly improving position.
Therefore, unlike day traders who will usually book their profits when they feel that a good trade has come to an end, which is often as much instinct as analysis, swing traders will set profit-taking orders on a successful trade and then just let the trade run its course.
Warrior trading full#
This means that every swing trader makes extensive use of the full range of order types, from the essential stop loss to exit a suddenly reversing trade to buy limit orders set on resistance levels to gradually enter trades over time at the most advantageous position. Swing traders wait patiently for prices to move into their forecasted range, anywhere from overnight to a week or two. Successful swing trading is about identifying trends and employing strong risk management.