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Update: Acceleration Band Buy Signal - Time to Exit?

|Includes: SPDR S&P 500 Trust ETF (SPY)

Just a quick follow-up from my previous post on the S&P500 Long Signal from 7/21/2009 - if you need a quick refresher on Acceleration Bands and how they generate long/short signals it's worth the time.

All too often traders focus on how and why to enter a trade while forgetting about managing the trade and the process of exiting.  In realty the life of a trade is broken down into three equal parts - Entry Parameters, Open Trade Management, and Exits rules.  For the Acceleration Band LONG signal we are currently managing the position.   My previous post focuses on the entry parameters and I'll discuss exiting this type of signal in the near future.

In every trade you should have defined key levels that help you navigate the charts while avoiding emotion.  For example, traders can use simple methods like moving averages to define key levels.  For options traders I recommend using a 10 bar exponential moving average and based on your time frame use values at the close of your bar.  As of now, the SPY has a key level at $99.64 on the daily chart - this means we need to hold this level at the close or the Acceleration Bands will signal an exit.  Check out the visual candy below: