Keep your eyes open for stocks bucking the trend

As a breakout trader, I only ever go long on new highs, or go short on new lows. Therefore, while the longer-term trend in the general market is still intact, the recent pullback or consolidation (not only in the major market averages, but more importantly in lots of individual stocks), in theory makes it difficult for me to participate.

One of the reason I am continuing to run through my scans and keeping my watchlists up to date is that you may find individual stocks that are bucking the trend, so to speak. 

Letting profits run

A trend follower never knows how long a trend will last. The old trading adage "Cut your losses, and let your profits run" is hard for inexperienced traders to follow. All a trend follower can do is control his (or her) risk, enter the trades at the appropriate entry points, follow their stop placements and see what happens. The trend may last a few days, or (hopefully) several months.

Psychologically, trend following is difficult to adhere to. I have found myself bailing out of profitable positions way too early, partly to bank profits, but mainly when I have been scared of a reversal, usually in the general market indices.