As $BLUE breaks out to new highs, one may consider if it’s too late to go long. Let’s take a look at the daily chart of $BLUE below.
$BLUE has consistently held the 200MA and 100MA since last year, and we’re now seeing the stock trend above the 20MA. This is a signal of a strong upwards trend. While that can change at any moment, current signals point to getting long.
For trend traders, what matters isn’t about how much money to make. Rather, what matters is being in the trend with the right position size, according to your personal risk tolerance, in order to stay in the trend.
Conservative traders would use the 200MA as a reference point when considering where to place their stop as part of the trend trade, while more aggressive traders would use the 20MA, as placing a closer stop allows them to have a bigger position size (albeit getting stopped out earlier should the stock fall down, but maintain trend above the 200MA). Again, this choice is up to the investor, and is one we highly recommend each individual consider before taking on a position in order to be able to hold for the duration of the trend.
Always consider the amount of risk you’re willing to take in the position, before you think about potential profits. As long as you manage risk properly, you’ll be able to stay with the trend.
Disclaimer: we are currently long $BLUE, with a stop below the 200MA at $85.51 as of the time of writing.