Using Charts to Form a Sell Discipline
The trend is your friend until it comes to an end. Many of us have no problem identifying the prevailing trend behind a stock with the help of simple tools like moving averages. However, we often watch those trends reverse, and yet we still hold onto our position, or even average down. It is easy to get married to positions because of the time spent analyzing and implementing them. This makes it essential to have an unbiased sell discipline. Charts can facilitate this by providing a framework for establishing price targets and stop losses, with indicators designed to signal a change in trend.