Runaway Trend Equals Runaway Train

You should always avoid trading a runaway trend. (See our article on stock trading trends.) If you have missed your planned entry price for a stock you are following, it is often better to wait rather than try to enter a position as the trend accelerates.

More than likely the stock will be pulled back and again test the trend breakout point allowing you to enter at a price closer to your original desired entry point.

If you are already holding a position in the stock just revise your exit point upwards and adjust your stops accordingly. Consider reducing your position to leave as much profit in the trade as possible.

Todd B

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