Last Friday, I received the question below. I must admit the question stimulated me to do some work, as I could not answer the question off the top of my head.
Is there a way to track stocks in foreign markets -specifically TSX?
So, I looked around a bit and discovered that finding quick and easy resources for tracking individual foreign stocks are difficult to find. A number of online brokers offer foreign stock investing, which means tracking. Other services offer foreign stock tracking, but since the arena is so large, these services are often specialized as to regions or countries. There may well be an easy and direct way to do this, but I don’t know what that is. Perhaps someone reading this or someone on this site can be more helpful to you …
I also received the request below, which is another difficult topic, but in a different way. Whereas the previous question is a matter of fact (the resources exist, or they don’t exist), what the reader below wants is a matter of individual determination.
I am a currency trader. I consider myself an intermediate trader. I have an eye for entries and I have a plan for entries on trades. I am a swing position trader. I need to see if you have any input on the exit plan and the adjustment plan on stops.
In my head, it is easier to get into a trade than it is to get out. It appears that the reader above agrees with me. The reason I believe it is easier to get in than to get out is that when a trade looks good from the outside, the choice is easy – take it – but once in, unless you are using a strict rules-based system, the emotions of greed or fear can make one indecisive. The way I deal with this is that I choose one of two ways to work a trade. When I enter a trade, I place a stop immediately, or I leave the trade open to see where it will go. I base my choice upon what I know about the trade, and what I know about a trade is everything I can know. Specifically, though, exiting trades depends on your risk management, your profit targets, and your ability to be nimble as you track your trade.
- You need to ascertain how much you can afford to lose on any trade, which will define your stop. Now, understand, the context of any trade will also determine how wide or narrow you make your stop, meaning understanding the big picture and the price action of the trade should play a role (pivot points for swing traders).
- Your profit target needs to be reasonable and defined by reality, meaning, you need to be aware of greed in defining this target. Define your target based on what you know about the potential movement of your trade (pivot points for swing traders).
- You need to be nimble because sometimes things change. Unless you are in a strict rules-based system (and this is not a bad way to go), adjusting stops and choosing the correct stop for a moving target is almost artful. One has to have a clear and intuitive understanding of the trade movement (pivot points for swing traders), and one has to be confident in the trade.
I wish I could be more specific, but every trade and every trader is unique, and true swing trading has a plethora of strategies for getting in and out of a trade. I hope some general advice about exiting trades is helpful to you.
Trade in the day; invest in your life …
