Hi my friends Dr. Barry Burns here with top dog trading. I hope you're having a wonderful day
and today we're going to talk about when to get out of a trade with your stock market trading
also futures also the eminis and Forex, anything you're trading this will work
the supplies
so today we're going to talk about getting out of a trend trade because
different types of trays have different types of exits so the exits are not
always exactly the same so let's talk about trends today and let's get going
so here we see that we have crossed above the 50 MA this line that turns
from green to red is the 50 period simple moving averages that is my line
in the sand between bull and bear market we get a tries to push up tries to get
into bullish territory doesn't really work very well and consolidates here a
little bit and then boom makes this thrust down and then we get into a good
clear downtrends this clears it in most importantly I mean that clear to the
upside this close to the downside but it's the retrace you want to look at
so the retrace is weak in other words when we get into trend trades
what we're looking for for an uptrend we want strong stock market movement up and weak
movement down
so there's a lot of buying for the bullish side and there's not much
selling might just be profit-taking very late selling to the downside we always
want to be in the dominant direction of the market where there's the dominant
energy that's the point
same with the downside so that's what we have here see here we have a strong move
up there we also had a strong move down
that's not what you want that is not a good sign for sustainable uptrend
because this down move negates this upload it actually completely indicated
it completely retraced one hundred percent
here we have a strong impulse move down and a very small move out
so then we encourage that ok this looks like now
the downward direction is down the sellers are overwhelming the buyers and
that we can get them that would be a first retrace in the trend this black
line by the way to 15
EMA and I look for the market to retrace approximately to the 15 exponential
moving average on these retraces and then we get another move down to move up
again just 32 the 15 EMA and holds it and another move down now
five waves is what I look for and I start counting these waves are not
Elliot waves are coming in waves after market crosses the 50mm i use that as a
confirmation of trend and so it's a little bit of a lagging indicator but
that's when I start counting my numbers and it's simply making lower lows on the
downside if we're going to the upside be making higher highs
now the average trend when you count it this way last five ways that's the the
statistical average and so once we get into that i'm looking at them to get out
during wave five WD Gann talked about trading being all about the confluence
of time and price and so this also has to do with timing in the sense that five
waves his average and then we're going to look at our cycle indicator
by the way if you're interested my cycle indicator i can share that with you and
just send me an email at . top trading calm and i'll show you how to get it
absolutely free and as well as a tutorial on how to treat it
this thing is amazing when you treat it correctly so I'm 35
that's the time that's optimal to get out of a trend now price and time I
agree with both of those let's do something else hear those so so that's
time let's look at price
so let's bring up the Fibonacci extension will go from the impulse move
we talked about what went down harsh and then retraced light and we are about
their I guess so
yes so we see we've got this would be what's called you or measured move
a hundred percent there's two hundred percent about two hundred percent is
quite often where the market will put in a way five
this was a little bit further and that's fine
so again now you've got the confluence of timing which is we five also cycle
indicator confirms that you've got your price time and price that comes over
here we've got the Fibonacci extension
now the third thing we're going to add to this is momentum and down here is our
momentum indicator and this is just the pure momentum indicator 14 . momentum
indicator and as you'll see the momentum from here to here had been down pretty
good
stay down below zero and then when we get into a five
it's more shell comes back up to the zero line and so that's the third
element i look for time price and a momentum shift now it's still negative
here
it's just weaker to the downside but it's still bearish
now if I wanted to take a reversal trade let's say I want to just go along at the
end but downtrend then what i would do is do the same technique except I wait
until momentum got above the zero line because i want bullish momentum the
bullish momentum this thing's not going up that strength because this could go
sideways for a while and then develop more strength and continue down and make
waves 79
11-13 so forth and that does happen sometimes
so if that's not the rule but sometimes the exception to the rule occurs so I'm
going to take a reversal trade which is a lower probability trade frankly then I
want to make sure that I've got momentum shifting into foolish territory now it
goes into polish territory and then it increases the zero line but does not go
down does not establish bearishness to it
so this at this time I've got 35
I've got a retest of it twice
that's our principal of three that I talked about if the market can't break
through a support level after three tries
usually it's not going to at least not now because market participants look at
that and say oh this price level has failed to break three times in a row
ok probably not going to happen and then people actually go the other direction
so that's great so we've got the rule of three
we've got a psycho low here we've got there are bullish momentum starting to
pick up and it does confirms and then sure enough now this is an aggressive
trade this is an early trade or getting in before the trend is confirmed
it's not confirmed to hear that we can use these things to get us in even
before its confirm that you got an hour into back to 1 2 3 4 and so forth
I'm so there you go that's both how to get out of a trend and into a trend
reversal two lessons and one today if you liked this video and you're watching
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yeah