Tackle Today: Power of The Pivot
April 23, 2021
≈ What and/or When?≈
Traders,
There are a couple of questions that come up often from traders that are new to the game. Those questions are “what” I am supposed to with my trades when the market misbehaves? This question usually comes when one gets into a trade without truly understanding both the mechanics of the trade and more importantly how to manage the trade. This can include closing out the trade or in the case of options, changing the trade into something more appropriate for the changing markets.
As for the second question, it almost always follows the first question. “When” I am supposed to close out my trades or change them to suit the market conditions? This is a good question and a very complex one that even when someone answers the question it often creates more questions. However, there is an answer to that question albeit there is no real one perfect answer, this will be a place to start.
The “what” requires a plan. A well thought out plan. A thoroughly researched and experienced plan and only the trader can learn “what” to do and “how” to execute it. As for the “when” the market can give us signs or rather tells as to when to enact a certain part of the good plan like adjusting or closing a trade. One of these signs is called a pivot. A pivot is simply a notable reversal in price and it noted by a confirmed change in direction. The magnitude and length of time for that change is always unknown but I stated it is a good place to start.
So, when you are building your well thought out plan, please remember to include a pivot provision that will cause you to make the change you feel is appropriate. This will not always give a trader the perfect timing but it will most assuredly be better than doing nothing.
Trade Well,
#TeamTackle
Chart of the Day
DHR Chart w/ RSI
This chart of the DHR shows a breakout on the earnings announcement which can sometimes denote strength. There is always the possibility that the earnings gap will fill but there is also a good chance of follow through.
Video of the day
Buy One, Hold One, Dump One
Traders Lounge 11 AM EST
Join the coaches in this live lounge, ask questions, discuss ideas or just sit back and listen to veteran traders discuss market conditions.
Halftime Report 12:30 PM EST
The Halftime Report starts at 12:30 EST and covers what news is driving the market, chart analysis from the movers and shakers of the day and fun in a way that only Matt and Tim can deliver.
At the Closing Bell 3:00 PM EST
Join Mark Justice each Friday as he covered the world of commodities and takes questions at the closing bell of the market.
Financial freedom is a journey
The Tackle Today series is brought to you by Tackle Trading.
Sign up now and gain unfettered access to all of the quality content and powerful Scouting Reports that our Pro Members enjoy for 15-days absolutely free with no strings attached and let us show you what your trading has been missing.
# Sign up now for a 15-DAY FREE TRIAL #
Legal Disclaimer
Tackle Trading LLC (“Tackle Trading”) is providing this website and any related materials, including newsletters, blog posts, videos, social media postings and any other communications (collectively, the “Materials”) on an “as-is” basis. This means that although Tackle Trading strives to make the information accurate, thorough and current, neither Tackle Trading nor the author(s) of the Materials or the moderators guarantee or warrant the Materials or accept liability for any damage, loss or expense arising from the use of the Materials, whether based in tort, contract, or otherwise. Tackle Trading is providing the Materials for educational purposes only. We are not providing legal, accounting, or financial advisory services, and this is not a solicitation or recommendation to buy or sell any stocks, options, or other financial instruments or investments. Examples that address specific assets, stocks, options or other financial instrument transactions are for illustrative purposes only and are not intended to represent specific trades or transactions that we have conducted. In fact, for the purpose of illustration, we may use examples that are different from or contrary to transactions we have conducted or positions we hold. Furthermore, this website and any information or training herein are not intended as a solicitation for any future relationship, business or otherwise, between the users and the moderators. No express or implied warranties are being made with respect to these services and products. By using the Materials, each user agrees to indemnify and hold Tackle Trading harmless from all losses, expenses and costs, including reasonable attorneys’ fees, arising out of or resulting from user’s use of the Materials. In no event shall Tackle Trading or the author(s) or moderators be liable for any direct, special, consequential or incidental damages arising out of or related to the Materials. If this limitation on damages is not enforceable in some states, the total amount of Tackle Trading’s liability to the user or others shall not exceed the amount paid by the user for such Materials.
All investing and trading in the securities market involves a high degree of risk. Any decisions to place trades in the financial markets, including trading in stocks, options or other financial instruments, is a personal decision that should only be made after conducting thorough independent research, including a personal risk and financial assessment, and prior consultation with the user’s investment, legal, tax and accounting advisers, to determine whether such trading or investment is appropriate for that user.
Love the buy one, hold one, dump one. Keep up the great work guys!