Setting target for stock trade

Setting target for stock trade is last thing you must do to complete your every stock trade setup. You need to know when you will have to realize profits from your trade.

You already have your entry and stop loss point . These values give you setup info which you must compare with your risk:reward ratio to decide if such trade setup is good or not.

Profit target could be found by these two techniques:

1. fixed price value
2. moving (trailing) stop value

This way you will set profit target for stock trade as fixed price values. These values can be set by these techniques:

• Next important level of support or resistance
• Previous movement of price
• Chart patterns
• Retracements

Previous movement of price value is used especially for pullback trades. You expect that stock move will be as strong as last similar movement before pullback. You can see example on this chart:

Here is one of my stock market trading tips
for setting fixed profit values:

Combine methods.
When your target is confirmed by two or more methods, then it is much better

Moving (trailing) stop value

In this scenario you need not to set fixed value where you will take profits. You are simply waiting when trade will go through your stop level. This stop level could be previously defined stop loss level but as trade develops you are going to move this level into your favor. That means that after some time when you use techniques of trade management your stop value will be already above entry point . Such trade will finish in profit.

Trailing stop value can be set below last support or above last resistance in trend move. Moving averages are also used very often as moving value of support or resistance. Trail stop level could be set near them.

Here is example of setting trail stop values during stock uptrend :

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