CandlestickLearning

How to Long Stay in a Trade

Patience or Process?

Can Process lead to staying with Patience in the Trade?

We shall find out at the end of this article!!!

“Early Exits out of fear and Impatience comes from Ignorance and Uncertainty of how much to Stay in a Trade!”

With CCI we have a process that answers and provides a solution.

Staying in the Trade is decided by CCI 34 5 min and with the strength assessment of momentum provided by CCI 34 30 min. 

Both together are variables for either Staying in the Trade or defining Exit Strategy. 

Cardinal Rule to Stay in a Trade

Rule: Buy Hold/Long till CCI 34 5 min remain above -60

Rule: Sell Hold/Short till CCI 34 5 min remains below 60

Strength of assessment of Momentum is based on CCI 34 30 min staying above 110 or below -110 for Long or Short respectively.

Both together give us conditions to Stay in Trade as below:

1.Buy/Long:

When CCI 34 5 min drops below -60 but CCI 34 30 min is above 110, no need to Exit.

Instead, continue to stay in trade till both concurrently go below -60 and 110 respectively i.e. Exit Strategy for Buy/Longs.

2. Sell/Short:

When CCI 34 5 min climbs above 60 but CCI 34 30 min is below -110 no need to Exit.

Instead, continue to stay in trade till both concurrently climb above 60 and -110 respectively i.e. Exit Strategy for Sell/Shorts.

CCI 34 5min is Instrumental in our Exit Strategies

It plays a pivotal role with concurrent confirmation of loss in momentum by CCI 34 30 min either moving below or above 110 or -100 in Long & Short Trades respectively.

Case Study:

As the events have occurred breakout below Open Range with consecutive strength star marked candles with CCI 34 30 min < -100 provides with the Breakout Momentum Trade @ 1464.

At the same time, CCI 34 5 min determinant of our Exit Strategy and Staying in the Trade too moves below -100.

The fall in price continues till CCI 8 5 min. Then it  spurts above -135 providing us with a Pull Back second Short entry, for pyramiding as concurrently CCI 34 30cmin remains below -110.

Even with this, CCI 34 5cmin hasn’t moved above 60. Hence, no need to book profits or Exit form the trade.

As would follow price declined with close and low for the day been same.

Prior to that let me remind that a Trigger to Exit does not mean instantaneous Exit. It’s only a decision to pack our bags.

The Moment to close the trade is governed by CCI 8 5 min. 

Two Rules of CCI 8 5 min:

  1. Buy: When CCI 8 5 min <-135 provided CCI 34 30 min >110′
  2.  Sell: When CCI 8 5 min > 135 provided CCI 34 30 min <-110

 

Exiting a Buy Trade

When the Buy trade turns suspect, one needs an Exit. What is bought earlier has to be sold. The rule for Sell is CCI 8 5 min > 135 provided CCI 34 30 min is < -110.

Let us understand it better with a case study.

Let us disseminate the above chart, by moving from left to right.

The first a momentum breakout to enter Buy Trade when CCI 8 5 min < -135 occurs at 534 bought on Pullback.

However, price kept sideways till CCI 34 5 min fell below -60, concurrently even CCI 34 30 min moved below 110.

That was a Signal to Exit the Trade. What was bought earlier had to be sold. The Rule for Sell is CCI 34 5m >135 provided CCI 34 30min stays below -110.

When next CCI 8 5 min > 135 moment occurred at that point :

  • CCI 8 5 min .. 137
  • CCI 34 30min ..106.65
  • CCI 34 5min .. 101.85

While we waited to Exit as per CCI 8 5 min > 135 to our advantage CCI 34 5 min turned bullish with value 101.85.

So Exit plan gets cancelled.

Exiting a Sell Trade

When the Sell trade turns suspect, one needs an Exit.

What is sold earlier has to be bought!

The Rule for Buy is CCI 8 5 min <-135 provided CCI 34 30 min is > 110 

Let us understand it better with a case study.

Let us disseminate the above chart, by moving from left to right.

First a Momentum Breakout to Enter Sell Trade when CCI 8 5 min > 135 occurs at 6614 short sold on Pullback.

However, prices kept appreciating till CCI 34 5 min moves above 60, concurrently even CCI 34 30min moved above -110.

That was a Signal to Exit the Trade.

What was sold earlier had to be bought.

And the Rule for Buy is CCI 8 5 min <-135 provided CCI 34 30 min is > 110

So we waited for next 13 candles i.e. near an hour for CCI 8 5 min to moves below -135.  When that happened, concurrently CCI 34 30min below -110 and we managed to Exit at 6622.

If we would have exited at first signal, we would have exited at 6635 but by following CCI 8 5 min Buy Rule, we saved a few and bought at 6622.

Exit strategies can reduce a good amount of losses if the method is followed.

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