The markets are nervous about an imminent raising of interest rates from the Fed, which interrupted an otherwise steady market yesterday.
One of the key skills you need as a trader is knowing how to set your profit targets. Typically I say make the first target (we call it P1) conservative.
In the case of MYL, whose setup I’ve liked recently, you had a choice between an aggressive or more conservative P1 target. It is at this level where you can seize control of your trade and put it into a virtually riskless state, so it is vitally important.
With this particular trade, by taking the flag pole of the bull flag from where it started to gap up on 13 November, you would be setting a conservative P1, which we always round down, meaning you’d have just been hit yesterday before the stock reversed back into the consolidation area. I know a few of you set your P1 around 42.42 – 42.46, which right now looks very smart, and you’ll be feeling happy with yourselves!
If you’d taken the flag pole of the bull flag from the low on 12 November, you would be setting a more aggressive P1, which didn’t get reached yesterday, so for you it’s a tougher ride.
Watch today’s video where I go through it in some detail.