Trading Operation Example: Moving Average Crossover
Instrument: Apple Inc. (AAPL)
Strategy: 50-day Moving Average (MA) crosses above the 200-day MA (a "Golden Cross")
Timeframe: Daily
Position Type: Long (Buy)
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Trade Setup
Entry Signal:
When the 50-day MA crosses above the 200-day MA.
Entry Price:
$175.00 (price at crossover)
Stop-Loss:
$165.00 (risking $10 per share)
Take-Profit:
$200.00 (aiming for a $25 gain per share)
Position Size:
100 shares
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Trade Management
Monitor daily for price action or news affecting AAPL.
If price hits $165, exit to prevent larger loss.
If price hits $200, exit with profit.
Trailing stop can also be used to lock in profits.
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Outcome Possibilities
Win: AAPL hits $200
Profit = (200 - 175) * 100 = $2,500
Loss: AAPL hits $165
Loss = (175 - 165) * 100 = $1,000