Trader's Daily Notebook: Wedged in a Channel?

For every silky smooth uptrend, such as the one we looked at on Amazon (AMZN) in Monday's Trader's Daily Notebook, there's bound to be a bunch of stinkers. So today we're going to look at what happens when we trade an instrument that rotates within a channel, continuously stopping out traders who utilize a volatility filter to try to hang on for the higher timeframe trend. 

iShares Russell 2000 Index ETF (IWM) -- Daily
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Trading can be incredibly challenging, and I can't think of a better example to illustrate this than the past six month of trading in the iShares Russell 2000 Index ETF (IWM) . Referring to the chart above, we can see how a trader trying to stay long versus the 50-day simple moving average (SMA, in red) could have been stopped out a dozen different times between late January and late May. Even with the benefit of a volatility filter such as the average true range (ATR), we could have been stopped on numerous occasions. ...285 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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