I recently wrote about my crosshair horizontal line or “battle exit” line and how it provides a visual picture of when to exit a trade that is not working (because not all trades work!).  When the battle exit line is crossed and there is a close below that line you exit the trade.  Period.  This helps solve the emotional dilemma of when to take a loss.  Very simple:  when the line is crossed you exit the trade!  The line does not lie. The battle exit line will not deceive you into thinking that you are always going to be right but instead allows you to trust yourself to do what is right!

Remember: One deceptive trade can kill a long string of winners. I bet many of you know what I am taking about. So, yes, I just may be singing to the choir here but bear with me for a few minutes.

Here is the second function of the horizontal exit line:  it can keep you in a good trade as it allows you to build confidence and patience.  Without confidence and patience you will never be a successful trader.  So let’s look at the horizontal crosshair line again:

CONFIDENCE AND PATIENCE

- — – — – — – — – — – — – — – — – — – — – — – — – — – –

SELF-TRUST

Above the line is confidence and patience building; below the line is the elimination of deceptive thought as you build the self-trust you need to take responsible action.

Let’s use a trade that I made just this week as an example. The stock is JPM.  Take a look:

If you follow my method of TRADING IN THE CROSSHAIRS you know that I have one repeatable pattern that I trade over and over again.  I know it is boring but it works!  JPM presented two opportunities in the last month.  The first in the middle of July was a move off the crosshairs without much of a pause.  Profit banked.  Then we had to wait for the next move which came at the end of July. Same pattern but with a pause back to the battle exit line.  It did not break the line but held steady and then rose again to allow for another profitable trade. Again we had to wait for the move.  Patience begets patience in this scenario.

Before entering a trade you must decide where you are going to exit if the trade is not working.  You must also allow the trade to work.  The battle exit line gives me the answer to both.  The profit point is entirely up to the trader.  I prefer quick profits over and over again.

I do not have the answer to trading because there is no such a thing.  What I do have is an answer that builds confidence, patience, and self-trust all at the same time.  It is all in a line. A simple line. Its all in THE CROSSHAIRS.

Post from: The CrossHairs Trader

TRADING CONFIDENCE AND THE CROSSHAIRS BATTLE EXIT LINE

Related posts:

1. WHEN TO TAKE A LOSS: THE CROSSHAIRS HORIZONTAL LINE
2. CAN MISSING A STOCK TRADE BUILD CONFIDENCE?
3. HIGH PROBABILITY TRADING IN THE CROSSHAIRS

Last 5 posts by David Blair

• CAN YOU CALCULATE YOUR WILLINGNESS TO TRADE? - November 23rd, 2009
• THE THINKING TRADER 11/20/2009 - November 19th, 2009
• OVERTRADING: YOU MIGHT BE A STOCKAHOLIC IF… - November 17th, 2009
• THE THINKING TRADER 11/13/2009 - November 13th, 2009
• VETERANS DAY 2009 IN THE CROSSHAIRS - November 11th, 2009