Trading in APA Corporation (NASDAQ:APA) is sideways on Monday. The stock is consolidating after its recent uptrend.

There is a good chance this uptrend may end soon. This is why it is the Stock of the Day.

Some people say there are no guarantees in the market. But they are wrong. There actually is one.

Markets are always trending. They are always either going up, down, or sideways. It is guaranteed that whatever the trend is, it will eventually change.

Some newer traders have a difficult time because they don't understand how counterintuitive trading is. Their instincts tell them to buy when things are going down and sell when things are headed higher.

But actually, it can be the opposite. Many successful traders sell when a stock has started to trend lower.

Traders who have profitable positions can protect them with the use of sell-stop orders. These are sell orders that are placed below the current market price. The idea is that if the stock reverses and reaches a certain price or level, it will keep going lower.

Some stop-outs are based on price. If a trader has a profit in a position, they may decide to sell it if it reverses by 2 or 3 points.

Others may use a strategy based on percentage. For example, if a stock reverses by x%, they will sell.

Another way to get stopped out is based on momentum. If a stock is extremely overbought, it will sell off when momentum begins to reverse back to neutral.

The bottom part of the chart is the Relative Strength Index (RSI). If the blue line is above the horizontal red line as it is now, it indicates overbought conditions. APA is the most overbought it has been in five years.

If the blue line begins to reverse and head lower, it could indicate the stock is not overbought anymore. The momentum is shifting back to neutral. Some would take this as a signal to sell.

Many traders are unsuccessful because they guess. Successful traders use exit strategies. Sell stops can be one of them.

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