A 70k bet that I can't make a 50% gain in 2009
- Thread starter geez
- Start date
You pretty much got it. You risked .20 to make .50, so good R:R. Stop typically under swing low or 5-minute signal bar. Target must be achievable (prior swing high or resistance).
Should you have sold at 40.85 instead of holding to 41? Debatable until eternity . . . or until you develop a track record to prove it to yourself or not. But Geez's objective was to hold until target reached, maybe taking some off and using a b/e stop on occasion. But I haven't personally seen him base decisions on the broader market price action while a trade is on.
Keep trading.
J.Scott
Although it was rare, on occasion I watched Geez allow price to come within a tick or two of his target and reverse all the way back to his stop if the target wasn't hit. That's pure cold discipline.
Finally, I couldn't stand it any more and insisted that if price moved all the way to within a few ticks of his target, he move his stop to b/e because it was just stressing me out too much. Being the kind person he is, he complied and added years to my life
Seriously, though, if you start cutting your winners short, then the whole 2:1 R:R loses its effectiveness over time.
On your trade, if you left the initial stop and target in place, what would've happened eventually? Because you went long a higher low and targeted the last high, I'm guessing your target would've been hit. In fact I'm guessing price made a higher high, because when it makes a higher low, it tends to make a higher high and if it doesn't then it's a pretty good reversal signal.
That's my bare minimum when I enter the trade, though I personally often move my stop to break even once a trade moves 1:1 in my favor. So if my initial stop was .10, I may move my stop to b/e once it's .10 in my favor. With volatile stocks like POT and AAPL, though, I allow significantly more movement before doing that.
thanks for the input.
I neeeded to stay in the game a little more, it eventually did get that new "higher high" at $41.30. Live and learn I guess. I should of moved the Stop to break even and I would've nailed it.
That was my concern cutting my wins short and impact the 2 to 1 ration. I also made the decision to get out because it was nearing the fed announcement and when the market reversed, I thought it made sense.(just what was going through my head.
I neeeded to stay in the game a little more, it eventually did get that new "higher high" at $41.30. Live and learn I guess. I should of moved the Stop to break even and I would've nailed it.
That was my concern cutting my wins short and impact the 2 to 1 ration. I also made the decision to get out because it was nearing the fed announcement and when the market reversed, I thought it made sense.(just what was going through my head.
one other question if i may, is their a time limit to stay in a trade? For instance if you buy stock xyz at $5, and are targeting $5.25, and the stock stalls at $5.10 for an hour, two hours, three hours or more, when should you just get out of it? How does the stall affect the opportunity for success?
I rarely trade after the first couple hours of the day because of that exact thing, price tending to get stuck while all the market movers are at lunch. As a day trader I make my living off movement.
But in your example, it's not moving while in a green state, so it's not really distracting you, especially if you use OCO (one cancels other) bracket orders. I'd let either hit target to stop out b/e.
You mentioned the Fed announcement . . . that's as good as any reason to go ahead and get out of your trade. Some may argue, but my opinion is that the premise of your trade has changed. Are you trading a setup or are you trading the announcement? So can't fault you there.
Likewise, if price is stalling - and in this case it might be a lead into something like the Fed announcement - once again, the premise of the trade has changed. If price goes nowhere, I let three small price swings occur . . . and if I'm not stopped out, I'll exit if at a loss or b/e . . . or like NoD, move to b/e if I've got a bit of paper profit to leverage. HTH.
JS
Geez....your first post in 7 months and 5 days? geeeeezzzzzzzzz
Gilmore Girls??? Must've knocked up one of those SLF's...