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The MEJT System: A New Tool for Day Trading the S 500 Index by Jeffrey Tennant

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7. Targets – Required and Optional

Setting price targets is one of the most important parts of the MEJT system.

When MEJT gives a buy (or sell) signal, it is not an invitation to act immediately. It means that a price target has been set at a higher (or lower) price. It is important to have criteria for determining what the minimum potential gain is from acting on the signal for two reasons:

  1. The risk/reward ratio must justify taking the trade.
  2. Resistance is to be expected just past a target at a higher price, and support is to be expected just past a target at a lower price. Unlike targets in other systems, the price of S&P 500 typically goes past MEJT targets.

Different types of targets

There are different types of targets:

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