You are a stock trader or investor and you want to know about setting price targets, then this post is for you. Some analysts believe that you can’t find targets. suppose you bought a stock at $10, you never know what will be the price target in another 10 years but that’s long term investing. But if you are short-term trader or short term investor then you must know your stop-loss and your price targets.
How can you find price targets?
- suppose you buy a stock at 100$ , then one percent will be the first target and two percent will be the second target, which is 101$ and 102$
- If you are using Fibonacci levels, plot the recent high and recent low and find the target one and target two
target 1 = ((swing high – swing low)*0.382)+ swing low
target 2 = ((swing high-swing low)*0.618)+swing low
You need to subtract the swing high in case of Selling
- You can use the Gann Square root formula to find the targets.
Target 1 = (sqrt(swing.low) + 1)^2
Target 2 = (sqrt(swing.low)+2)^2
the above formula is for buy and for sell you can try ,
target 1 = (sqrt(high)-1)^2
target 2 = (sqrt(low)-2)^2
these are the steps that are static but the targets keep changing with the volatility in the market. Which indicator will you use in your trading routine. I have a clue, you should use the bollinger bands for the targets or use the parabolic sar for your trailing stop-loss. Find the Parabolic SAR value from the daily chart, which is easy and you can use it in intraday. I use a more advanced stop and reverse technique which has less whipsaws and tuned to use for daily trading and investing.
Check out the book on Amazon called ” Trade,invest,save and spend” and it’s applicable for stocks, future,Forex and crypto-currencies.