Ask Colin

When a breakout is to a price above your upper channel, would you still buy?

Yes and no. If a breakout is strong, I like to put on part of my position, just in case we have a runaway trend. However, in most cases, there will be a pull-back and I prefer then to increase my position at fair value. There are a number of ways of doing this. One is to buy near the 22-day exponential moving average - a technique I learned from Dr Elder. Another is to buy on evidence of support - my favourite method. 

Keywords: