The point of this post is two-fold; First, to discuss the pros & cons of employing a flexible vs. rigid trading plan and secondly, to make a quick update on UCO/crude oil.
Some traders practice the use of rigid trading plans, whereby they identify exactly where they will book profits or take a loss (stop out) before they enter a position. While a rigid trading style certainly has its merits, my preference has always been to use a more flexible trading plan with many of my trades, often adjusting or modifying my profit target(s) and stop level(s) after establishing a position. After entering a trade, I continually monitor the charts of both the broad market, the sector of the position (individual stock or ETF) as well as technicals on the position itself. If the trade goes as expected without a material change in the technicals, my original trading plan (sell targets & stops) will remain in place. If something convinces me to extend my profit target or stop loss levels, or even to book profits early, then I typically don’t have a problem doing so.