The Simple Way to Time Your Entries and Exits

To improve your buy and sell decisions, you need this knowledge...‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ 

SPONSORED 1 Trade Idea Delivered Every Week 83% win rate and a guarantee he beats that! Has this former CBOE trader lost his mind?? Watch this immediately. Editor's Note: To learn more about support, resistance, trend lines and other indispensable market analytics, check out Chief Income Strategist Marc Lichtenfeld's free training series on technical trading, How to Trade Like a Champion. This virtual three-part series follows Marc as he explains three chart patterns used by Wall Street professionals and U.S. Investing Champions. One of these patterns has already helped an investor turn $11,000 into $18 million in just 18 months. How to Trade Like a Champion is open to all of Marc's readers, so click here to learn how to invest like the best using powerful technical indicators. - Kyle Wehrle, Assistant Managing Editor FINANCIAL LITERACY A Trend Is a Trader's Best Friend Marc Lichtenfeld, Chief Income Strategist, The Oxford Club "How do you decide when to buy or sell?" is a question I get often from investors and traders. After all, you can pick a great stock, but if your timing is wrong, you'll lose money. Early in my career, when I was first studying technical analysis - the use of market data and charts - I came across a simple but effective rule to make buy and sell decisions easier. I use support and resistance levels to time my entries and exits. Support is a level where a stock stops going down. It could be for a variety of reasons, but that price level shows over and over again that it acts as a floor for the stock. You can see what I'm describing in this chart of GrowGeneration (Nasdaq: GRWG). Every time the stock dropped to about $37, it bounced. That $37 area serves as support. If you were looking to buy the stock, the support line (or close to it) would be a good place to get in because if the stock breaks support, that suggests something in the market has changed and you can cut your losses quickly, keeping them small. So buying near support lowers your risk. And in fact, GrowGeneration's stock did break beneath support on Thursday, as seen in the chart below. When you see a stock break a strong level of support, that's your sign to head for the exit. I generally want to see a drop of about 3% below the support to feel confident that the move is real and not market noise. It's not a guarantee that the stock is going lower, but it does suggest that the psychology of the market has changed. Buyers stopped stepping in to buy the stock at $37. We don't always know why, but they stopped. Support does not have to be a flat line at one price. Look at this chart of Morgan Stanley (NYSE: MS). The blue line is called an up trend line. It's a line of support that is rising. Every time the stock hits the trend line, it bounces. Again, as a stock approaches its trend line (support), it's a good spot to enter a trade. If it breaks below the trend line by 3% or falls below the previous low, that's a good spot to get out. SPONSORED Get Marc's Top 5 Dividend Stocks (FREE PICKS) World-renowned income expert Marc Lichtenfeld just released his Ultimate Dividend Package. Inside, you'll find his TOP FIVE dividend stocks right now. And today, he's giving you this package to you... completely free of charge! To get your FREE dividend recommendations, click here now. The opposite of support is resistance. That's an area that a stock has difficulty getting above. This chart of TE Connectivity (NYSE: TEL) shows the stock had problems rising above $140. If you were interested in the stock, it would have been a good idea to wait until it broke $140 to know that the psychology about the stock had changed and the sellers were no longer overpowering the buyers. That happened in late July. You can see that the stock meaningfully broke $140 and continued higher. And just like support doesn't have to be at one price, neither does resistance. Here's an up-to-date chart of Delta Air Lines (NYSE: DAL). You can see that the stock has been moving lower, hitting resistance along a down trend line since June. If you were interested in buying Delta, it would have been a good idea to wait until a meaningful break of that trend line (resistance). Or, when the stock approached the trend line, it would have been a good spot to short it. You can see that the stock recently broke above the trend line by about 3%. Bulls may want to buy the stock here because if it slips back below the trend line, then you know it's probably a false breakout and the sellers are back in control. You can cut your losses quickly. As I always say, technical analysis is not crystal ball reading. But it provides strong guides for when you can consider entering and exiting trades based on changing psychology in the market. Importantly, it gives you a plan for your buy and sell decisions that removes emotion from the process. If you know you're selling a stock once it drops 3% below support, then you can pull the trigger on that sell order without rationalizing why you should stay in. The chart is telling you it's time to get out. Good investing, Marc Leave a Comment MORE FROM WEALTHY RETIREMENT Three Dividend Payers You Can Count On Which Trading Style Fits You? Peeking Behind the Curtain at a $150 Million Bet Facebook Twitter Email Share Push Alert SPONSORED Do you own gold? 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