Price Target

Price Target Overview

A price target is the expected level at which to exit an open position.  Price targets are a key component of any trading plan.  In order to trade effectively, a trader must know when to get off the bus. 

How to set a Price Target

There are many methods for setting a price target.  One of the more basic approaches is to look for recent pivot points.  Technical analysis provides for a number of ways from elliott wave, trend lines, fibonacci, to point and figure charts.  This is the issue with setting price targets, every trader has a target in mind.  So, who is right?  This is why price targets are more of a guide and not set-in-stone. 

Analyst Price Targets

While this site is centered around empowering investors to make their own decisions, we also have to give full disclosure.  Instead of looking inwards for direction, many traders look to analysts reports.  We've all heard them, the morning price target set by UBS or Goldman, which ultimately pushes the stock to a certain level.  Now it may feel great to hear an analyst say your stock is headed to $100 dollars in the next 6 months and it is currently trading at $50.  Any seasoned investor knows that it is simply impossible to know what a stock in the next 30 days, let alone the next 6 months.  This is why it is most important for you the trader to set your own price targets that will make the goals based on your trading plan.

 


Tim Ord
Ord Oracle

Tim Ord is a technical analyst and expert in the theories of chart analysis using price, volume, and a host of proprietary indicators as a guide...

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