The main stock market indexes kicked off 2020 at record highs, but have finally started to pull back over the past week.
Now more than ever, having an objective and clearly defined exit strategy is crucial to locking in maximum gains on your winning stock trades.
For the overwhelming majority of traders, knowing when to sell is exponentially more difficult than knowing when to buy.
Many trading-related books devote several chapters to technical analysis and how to buy a stock, but offer minimal information regarding when to sell.
Raging bull markets make entries even easier, but knowing how to properly manage a winning position is key to maximizing your profits when stocks inevitably correct.
Continue reading to discover how Morpheus Trading can provide you with a simple and effective strategy for managing your winning trades now.
+17% Gain on Breakout Entry–But Now What?
In our nightly swing trading newsletter, The Wagner Daily, we are currently long Sea Limited (NYSE:SE) with an unrealized gain of 17% since our buy entry.
We bought $SE due to the bullish “cup with handle” like pattern that developed from August-December of 2019.
We also liked the high volume gap up above resistance at $32 (in November), which was clearly a bullish signal by itself:
This trade is working out really well so far, with the price holding above near-term support of the 10-day moving average since breaking out.
Since we never know exactly how far a stock will run, we simply let the price and volume action guide our decision on when to sell.
Keeping an open mind for every trade, we react to price action, rather than trying to predict it.
Selling is never an easy decision, which is why we rely on one amazingly simple indicator to help manage our winning trades.