What happens if a stock you own shoots skyward? When do you get out? Do you get out at all?

These are great questions that need to be addressed in order to make the most money possible. Traders want to let profits runs and cut losses short. You cut losses short through risk and money management, but how do you let profits run?

One of the best ways to let profits run is to use double cross over moving averages. This is a pretty simple concept. You have two moving averages: one short-term average (e.g. 15- or 50-day, depending on the type of investing you are doing), and one long-term average (e.g. 30- or 100-day).

If you are in a stock that is soaring, and you don't know if you should get out, take a look at the short- and long-term moving averages . If the short-term average is above the long-term average hold the investment. Sell the investment when the short-term average crosses below the long-term average. This type of moving average analysis is also called the Golden Cross.



Andy Swan is co-founder and head trader for DaytradeTeam.com. To get all of Andy's day trading, swing trading, and options trading alerts in real time, subscribe to a one-week, all-inclusive trial membership to DaytradeTeam by clicking here.