How to Exit a Profitable Position? (Part 2)

Previously, we talked about the ONLY two ways to exit a position. 

Your way and the market way. 

What is the market way? It's simple. Do whatever the market tells you to do. Follow the sentiment of the market. Listen to the market just as you listen to your parents (many of you don't).

When the market whispers to you: "Hey trader, it's time to exit." You really should get out. As fast as possible. The market is not your home where you disobey your parents and still have them love you. You disobey the market, you pay the price. Fair enough? You naughty kid!

"But I can't hear the market's whisper."

"That's not because you're not listening. But you don't know how to listen."

"Can you tell me how to listen to the market?"

"You know I'll always say YES to you."

The market's whisper always, always, always comes in the form of Japanese Candlestick Patterns (JCP) formation. 

First of all, let's recall the two types of JCP: 

1. Bullish Reversal: the price is likely to go up.
2. Bearish Reversal: the price is likely to go down.

(If you have no idea what you're reading now, go back to the Learning Hub for a revision.)

For Bullish Reversal, there are 7 JCPs: 
1. Dragonfly Doji 
2. Hammer
3. Bullish Engulfing
4. Piercing
5. Tweezer Bottom 
6. Three White Soldiers
7. Morning Star

For Bearish Reversal, there are also 7 JCPs:
1. Gravestone Doji
2. Shooting Star
3. Bearish Engulfing
4. Dark Cloud Cover 
5. Tweezer Top
6. Three Black Crows
7. Evening Star

Here's how you listen, follow and obey the market:

If you're going to open a long position, enter with Bullish Reversal JCP and exit with Bearish Reversal JCP.

If you're going to open a short position, enter with Bearish Reversal JCP and exit with Bullish Reversal JCP 

I know what you want to say. Just hold on, let me illustrate with a long position: 


Take note of the two critical points (red arrows).


Zoom in the chart and we saw a Bullish Engulfing (your entry point) formed at the Support zone. Did you see how the price reacts afterwards? 


If you're applying the market way, you should exit when a Bearish JCP is formed at the Resistance zone (red arrow). Since there's none for now, we should be patient and wait for one. 

Here's a bonus for you: Do you need a confirmation when exit? Just get the hell out, my friend!  

Now, pen this down:
1. If you go long, enter with Bullish Reversal JCP and exit with Bearish.
2. If you go short, enter with Bearish Reversal JCP and exit with Bullish.



---Your Way to Becoming a Profitable Trader---

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