The Trend Rebound Method
As trends mature there is a growing pobability of a significant correction, back to an area of support. The Trend Rebound Method looks for a rebound off of support followed by a continuation of the prevailing trend.

This third method, ETF Profit Driver's Trend Rebound Method, also takes advantage of a pre-existing trend. However, with this third method our objective is to buy into the market after a pull-back, when there is a confirmation of market strength.

In sum, we want to allow an extended market to retreat back to an area of support and then buy the ETF as it rebounds off of that support. A stop loss is immediately placed below support, in an area where we would not expect prices to fall if the trend is to continue.

Of course, if prices do break through support it is unlikely that the trend will continue and in such a case there is no justification for us to be in the trade.

As we have done with the prior methods, half of the position is exited when an initial profit is seen. The remaining portion of the trade is allowed to appreciate with the continued upward trend, while a trailing stop is maintained to force an exit should the trend conclude.

The fourth trading method designed to benefit from re-emerging trends is revealed in our review of ETF Profit Driver's Trend Recovery Method.

by TheOptionClub.com -

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