I pick a good trade and it goes up usually 5%-10%, yet my analysis shows it might go up 20%-30%, once the pattern plays out. I notice most will go up 5%-10% and then the market reverses a couple days later. Should I always sell for 5%-10%? On what should I base my decision to sell or keep until the pattern is complete?

If you detect a familiarity with the question today, it is because it is from the same person I answered yesterday. The content of the question today also refers to trading on a “pattern.”

Technical analysis, or more specifically chart reading, is an interpretive art that requires a certain skill set to achieve success. Frankly, I don’t rely on it because I don’t have the time or desire to learn the interpretive nuance that is the basis of the art. I do, however, see the value in it, and I do know that many a successful trader utilizes it well to make good money.

My point today is that if one is going to utilize chart reading to pick and run trades, one had better know his or stuff. One had better understand the interpretive nuances of trading on a forming or formed pattern. This might take years to do well, but it can be done.  My advice is that a learning trader get involved with ongoing tutorials or “lessons” to facilitate the learning process. It is not enough just to learn a few of the various patterns and look for those.

To my advice, I once again point out that this site is dedicated to educating traders in all facets of trading. The commentaries come from some really great minds, and they are many and diverse. One could learn much from simply reading a half dozen a day.

For those who want and need more education, this site offers webcasts, interviews with talented folks, e-books, tutorials, in-depth articles about specific trading topics, and live webinars about specific trading strategies. So check out the tabs, especially the “Education” tab. I can assure you, something of value is there for you, and if what you want is not there, let someone know what you want. Who knows? Maybe something can be created that fits your needs.

As to the question above, no market continually rises, as you note. As I said yesterday, take your profit when you can. Think about it this way. If you could make 5% on every trade you make, and you make 20 trades per month, your ROI would be 100% per month. Of course, this will not happen. The point is that 5% is a profit many a trader would love to have, so when you say “I pick a good trade and it goes up usually 5%-10%” take that profit and run. Don’t be greedy.

Trade in the day; invest in your life …                                                                            

Trader Ed