Apple is currently flirting with its all-time high. Here are two long-term charts of
AAPL during its sell-off in 2008 and uptrend since then. Notice that the guppy multiple moving average chart of
AAPL continues to mostly show bullish signs and the stock has not violated a 7-ATR trailing stop since Apple made a
new all-time high last October. Other possible entry points were when the guppy chart showed a bullish trend reversal in March 2009 (when the red lines crossed above the black lines) or when the 200-day moving average started sloping upwards in April 2009.
As always,
the key ingredients were:
- identify a stock with a strong trend,
- join the trend, and
- have an exit plan that limits losses and lets profits grow thereby creating an outcome distribution that is skewed towards profitability.
An additional ingredient that I will discuss more sometime is scaling into a trade as it goes your way. For example, adding to a position each time it increases by 1-ATR from the purchase price.
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