In addition to the target and stop loss orders, the zero line cross trade includes an exit and reverse signal. If an entry in the opposite direction is signaled, before either the target or stop loss orders have been filled, the trade should be exited and reversed.
For example, if the original trade was a long trade, then the new trade would be a short trade, and vice versa. If a new trade is entered, you should make sure that any pending orders from the previous trade have been cancelled, and that new exit orders are placed, either manually, or automatically by your trading software. A trade that is exited because of an exit signal can be either a winning trade or a losing trade, depending upon the price at the exit.
There are a number of other possible exit signals, including the 50 bar CCI crossing back over the zero line (without signaling a new entry), the price crossing back over the moving average, or the low (or high) of the entry bar being broken. The exit signal that works the best will depend upon the market being traded, and therefore should be adjusted accordingly.
