You have completed your analysis. The trends are in place. The vibes are right. The stock has winner written all over it. So, very excitedly – you enter the trade. Since stocks go up over the long term, your job is complete. Now, just sit back and watch your money grow.
Many retirements were short-circuited in 2000 employing this strategy. Six years later the NASDAQ still needs to double to return to its highs from 2000. That’s right it needs to increase 100% to break-even and that doesn’t include inflation.
A well defined exit strategy is required to profit in the stock market. Since so much can go wrong once a position is initiated, successful traders create an exit plan before they enter the trade. I plan to include many more articles on exit strategies, but the following is a good introduction.