Profits in the financial markets require multiple skills that can locate appropriate risk vehicles, enter positions at the right time, and manage them with wisdom and a strong stomach before finally taking an exit when 澳洲幸运5官方开奖结果体彩网:opportunity cost turns adverse. Many investors, market timers and traders can perform the f♚irst three tasks admirably but fail miserably when it comes time to exit positions.

澳洲幸运5官方开奖结果体彩网:Getting out at the right time isn't difficult, but it does require close observation of 澳洲幸运5官方开奖结果体彩网:price action, looking for clues that may predict a large-scale reversal o𝐆r trend change. This is an easier chore for short-term traders than long-term investors who have been programmed to open positions and walk away—holding firm through long cycles of buying and selling pressure.

While 澳洲幸运5官方开奖结果体彩网:buy-and-hold strategies work, adding exit timing mechanisms can yield greater profits because they address the long-developing shift from 澳洲幸运5官方开奖结果体彩网:open outcry 💯and specialist matching to algorithmic software code that seeks out price levels forcing most investors and tra💧ders to give up and exit positions. This predatory influence is likely to grow in the coming years, making long-term strategies more untenable.

Failing rallies and major reversals often generate early warning signs that, if heeded, can produce much stronger returns than waiting until 澳洲幸运5官方开奖结果体彩网:technicals and 澳洲幸运5官方开奖结果体彩网:fundamentals line up, pointing to a change in conditions.

High-Volume Days

Keep track of the 澳洲幸运5官方开奖结果体彩网:average daily volume over 50 to 60 sessions and watch for trading days that post three times that volume or higher. These events mark good news when they occur in the direction of the position—whether long or short—and warning signs when they oppose the position. This is especially true if the adverse swing breaks a notable 澳洲幸运5官方开奖结果体彩网:support or resistance level.

Uptrends need consistent buying pressure that can be observed as accumulation through 澳洲幸运5官方开奖结果体彩网:on-balance volume (OBV) or another classic volume indicator. Downtrends need consistent selling pressure that can be observed as distribution. High-volume sessions that oppose position direction undermine 澳洲幸运5官方开奖结果体彩网:accumulation-distribution patterns, often signaling the start of a 澳洲幸运5官方开奖结果体彩网:profit-taking phase in an up🗹trend or value buying in a downtrend.

Also, watch out for climax days that can stop trends dead in their tracks. These sessions print at least three to five times average daily volume in 澳洲幸运5官方开奖结果体彩网:wide-range price bars that extend to new highs in an uptrend and new lows in a downtrend. Further, the climax bar shows up at the end of an extended price swing, well after 澳洲幸运5官方开奖结果体彩网:relative strength indicators hit extremely 澳洲幸运5官方开奖结果体彩网:overbought (uptrend) or oversold (downtrend) levels.

Failed Price Swings

Markets tend to trend just 15% to 20% of the time and are caught in 澳洲幸运5官方开奖结果体彩网:trading ranges the other 80% to 85% of the time. Strong trends in both directions ease into trading ranges to 澳洲幸运5官方开奖结果体彩网:consolidate recent price changes, encourage profit-taking, and lower 澳洲幸运5官方开奖结果体彩网:volatility levels. This is all-natural and a part of healthy 澳洲幸运5官方开奖结果体彩网:trend development. However, a trading range becomes a top or bottom when🐽 it exits the range in the opposite d𒁃irection of the prior trend swing.

Price action generates an early warning sign for a trend change when a trading range gives way to a breakout or 澳洲幸运5官方开奖结果体彩网:breakdown as expected, but then quickly reverses, with the price jumping back within range boundaries. These 澳洲幸运5官方开奖结果体彩网:failed breakouts or breakdowns indicate that predatory algorithms are targeting investors in an uptrend and 澳洲幸运5官方开奖结果体彩网:short-sellers in a downtrend.

The safest strategy is to exit after a failed breakout or breakdown, taking the profit or loss, and re-entering if the price exceeds the high of the breakout or low of the breakdown. The re-entry makes 🌞sense because the recovery indicates that the failure has been overcome and that the underlying trend can resume. More often, the price will swing to the other side of the trading range after a failure and enter a sizable trend in the opposite direction.

Moving Average Crosses and Trend Changes

Short-term (20-day 澳洲幸运5官方开奖结果体彩网:exponential moving average, or EMA), intermediate (50-day EMA) and long-term (200ꦰ-day EMA) moving averages allow instant analysis simply by looking at relationships between the three lines. Danger rises for long positions when the short-term moving average descends through the long-term moving average and for short sales when the short-term ascends through the long-term.

Price action also waves a red flag when the intermediate moving average changes slope from higher to sideways on long positions and lower to sideways on short sales. Don't stick around and wait for the long-term moving average to change slope because a market can go dead for months when it flatlines—undermining opportunity-cost. It also raises the odds of a trend change.

The Bottom Line

It's easy to find positions that match your fundamental or technical criteria, but taking a 澳洲幸运5官方开奖结果体彩网:timely exit requires great skill in our current fast-moving el🧜ectronic market environment. Address this task by being vigilant for these three red flags that warn of an impending trend change or adverse conditions that can rob you of hard-earned profits.