I know you’ve seen me post a few times on measured moves now, but I’d still like to drive home the point further. Many people ask me how to know when to get out of a trade… but often the chart itself tells you all you need to know, well in advance. The market gets into a kind of rhythm, and it’s amazing how long it will stick with the same size moves at times. Look at this chart of 6E (click to enlarge):
The three cyan lines are exactly the same size, measured from the initial drop into the flag/pennant consolidation outlined in blue. The last drop has two different measured targets (cyan and purple) confirming the market will take a breather in the same general area.
It pays to learn the classic chart patterns. Literally!
Lest you think this can only be done in hindsight, here’s a 6J trade I posted in the MtM Team area today, all based on classic chart patterns and targets:
This one was messy (real trades tend to be!), but you can see where ninja marked my exit right in the vicinity of two different measured targets. The icing on the cake is: so far, I got out at the bottom tick of the move. sweet!