one of the most common hindrances that plagues both traders and investors alike is the inability or difficulty of following the old wall street adage: cut your losses and let your winners run. sounds easy and simple enough yet i’d venture to guess that the vast majority of retail traders and investors do exactly the opposite.
with that being said, i just wanted to reiterate my preference for at least T3 (on the daily frame which is T1 on the weekly frame) as my primary target on the CMG short trade at this time. i’d imaging that many who took this trade, especially anyone who shorted CMG on the original trigger back on april 20th (around 425, or 185 points ago) is contemplating covering their full position here, if they haven’t done so already. yes, there is another wall street adage that goes: nobody ever went broke taking profits. however, i don’t exactly agree with that one in general as if you continually take quick profits and don’t keep your losses to a much smaller level, you will go broke eventually.
either way, i just wanted to state that i still prefer the previously stated targets (T3 daily/T1 weekly) and very well might extend my preference to the weekly T2 target although I will most likely reverse the trade (short to long) for a bounce-trade off T3/T1 if/when prices get there (assuming the charts confirm a bounce). of course, with today’s large move down on CMG, it is only prudent to lower your stops on the trade. since T2 is now well in the rear-view mirror due to the large gap down today, one might consider a stop not too far above today’s high on CMG (mine will be just north of the 255 area). updated daily & weekly charts below:
