THE HAnDbook of TECHniCAl AnAlysisthe time of entry since we have already received confirmation of a throwback off
the uptrend line AB and prices are now headed downward. But the entry would
also be regarded as risk seeking or aggressive with respect to the price on entry,
since we are shorting at a less favorable price.
Refer to Figure 26.4. If we shorted at Point 1, before price breached the up-
trend line AB, our entry would be regarded as risk seeking or aggressive with
respect to time but conservative with respect to price. And if we shorted at Point
2, after confirmation of a price violation of uptrend line AB, our entry would be
considered as aggressive in price.
We shall now turn our attention to exits. Refer to Figure 26.5. Assume that we
bought in at a much lower price and are now considering exiting the market with
a profit. Consider exiting at Point 1, which is below some significant resistance
level AB. Exiting at this level would be considered conservative with respect to the
time of exit, since we have obviated the possibility of any further loss.
Figure 26.5 Risk Profile for Long Exits.
Figure 26.4 Risk Profile for Short Entries.