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3. Trend Trade EXIT Points:
Most trading systems use a moving average to exit trades. Moving
averages are usually derivatives of price and do not represent the truth
of the market. Furthermore, moving averages can be adjusted with
variables such as simple vs. compounded. Moving Averages do not
represent the true realities of the market.
Using the “Pyramid Trading Point®”, you are trading with market
“truths”. You will set your stop-loss EXIT at the “Base Leg” of the
Pyramid. A trade EXIT signal is generated when prices reverse one-
tick past the “Base Leg”.
If prices reverse and pass the “Pyramid Trading Point®” “Base Leg”,
then some new information came into the market causing the reversal.
We EXIT the trade based on price activity.
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