When a trade entered goes as planned, the next step is to exit the trade.
If you are following a trend following method such as crossing moving
averages, MACD signals, or Momentum, these indicators will also be you
trigger to exit.
Many methods will keep you in a stock either long or short. Other methods
will use one or more indicators just for exit, and another for entry.
Let look at an exit strategy for Juniper Networks (NASDAQ: JNPR).
Since the August 3 reversal low in JNPR, the stock has risen sharply from
120 to 170.
This move over the past week has been a definite uptrend and an example of
how any of the indicators we follow regularly would have helped a trader get
into this move.
The MACD, Moving Averages, and channel breakout methods would have all had
you in the stock at slightly different points.
Now, a trader in a stock with this amount of gain should worry about an exit strategy to
maintain profits.
The MACD indicator has already flashed Sell.
The Moving Averages just crossed to a Sell.
Some support came in Friday at 155.
Many traders would already be out of JNPR. However, if you are still in and
it breaks this 155, I would exit longs in JNPR.
