Wednesday, July 18, 2012

Trends tend to persist

Once a trend takes hold, it will continue even if the general market itself reverses trend. It is always advisable to continue to hold your positions until such point in time that you get an exit signal for your position.

The chart below is a classic example, where the initial short signal was given in early May at a similar time as a downtrend was signalled on the FTSE, yet while the index has now reversed trend, this particular UK stock has carried out downwards.

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