Get Maximum Profit

Maximum Profit Targets

This lesson we are going to work out the best way to take maximum profits from a position long or short. Many traders know how to get into a position but are often uncertain when they should get out. In our last lesson we discussed Fibonacci levels and how to use these levels for entry and stop placement. So we have a sensible place to enter the market and a sensible place to put our stop loss now we need a logical target. Don't worry if this sounds a little complicated it isn't. From the last lesson you may remember that we calculated out retracement levels by measuring the distance between point A and point B. All we are going to do now is add another measurement called point C to get some fibonacci expansion ratios. We will eventually finish up with two targets. T1 and T2. We shall discuss which one to choose later. The formula for the calculations would look like this. T1 = .618(B-A)+C T2 = B-A+C

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