If Stock Market market is a highway, these are its 3 signal lights:-
1) Green (Entry signal) = Don't enter till u see this signal
2) Yellow (Exit signal) = Don't stop till u see this signal
3) Red (Stop Loss) = Stop when you see this signal
How u decide when & which of these signal lights-up depends upon the trading system u follow. (I hope u have one. not having one is stock trading's no.1 mistake). e.g. rsi cutting 30 from below can be the green signal, it cutting the 70 from above can be the yellow signal.
Similarly, any other technical indicator can serve as these signals.
These lights are important because we enter the trade at wrong time and book profit too early. Also, we don't obey stop loss RED light.
Drive safely...Obey traffic rules.....
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