Post Sun Jan 27, 2019 11:38 pm

Guidelines for Achieving Take Profit With a Moving Average I

Guidelines for Achieving Take Profit With a Moving Average Indicator

Well, if you already understand how to translate signals to open trading positions, then we discuss the exit strategy. Again, we must set the exit strategy so that the Take Profit target can be achieved optimally. Because without planning to close the position, it's the same as we trap our own account if the price turns out to change suddenly.

Before determining the Take Profit target, ideally we also have to determine the Stop Loss limit. Simply put, the Stop Loss limit will close a position with floating minus at a certain price level before the loss gets bigger.

Here are practical ways to determine Take Profit and Stop Loss limits using the Moving Average indicator:
1. Use various combinations of indicators to clarify the quality of trading signals

Basically the Moving Average is a lagging indicator, so trading signals usually appear only after prices form a trend. The problem is, nobody knows exactly when a trend will take place. It could be in a short period of time, the price turned out to experience a correction or even reverse direction (reversal).
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Therefore, so that trading signals are more responsive and free of fake signals, use one indicator to filter trading signals while another indicator to confirm.
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2. Use the help of other indicators to find out the strength of the trend
In addition, the CCI indicator and RSI indicator can also be used to find out overbought and oversold conditions on the market. Overbought and oversold conditions can be used to measure the extent to which the trend will continue.
As long as the market is in overbought condition, sell signals will have a higher chance of gaining profits than buy signals. Conversely, if the market is still oversold, consider prioritizing buy signals rather than sell signals.