After the 1st leg up do you sell or hold?
- Thread starter rin4et
- Start date
MattZ
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I think that many traders struggle with two decision makings:
Should I let some of my Futures contract(shares) run, or take them all off one my initial target hit? if they trade only a single contract, they struggle whether to use a trailing stop or to take to take it off.
In my personal opinion, if you are a beginner trader, you are better off just taking all the contracts(shares)off when they reached your initial target. More often than not, beginner traders rely on "potential" than fact when they start calculating gains that can occur.
Also, think of your decision-making process in the context of the current market. Right now, we are in a low volatility environment, so it would be better to get out and observe a new set up. Time and experience will show you what approach you should take. Keep a spreadsheet of your trades, the decision you took and watch what the charts did after. That way you might reach an objective opinion not based on gut feeling which is more often than not may mislead. I hope this helps.
(The placement of contingent orders such as a “stop-loss” or “stop-limit” order, will not necessarily limit your losses to the intended amounts, since market conditions may make it impossible to execute such orders)
Should I let some of my Futures contract(shares) run, or take them all off one my initial target hit? if they trade only a single contract, they struggle whether to use a trailing stop or to take to take it off.
In my personal opinion, if you are a beginner trader, you are better off just taking all the contracts(shares)off when they reached your initial target. More often than not, beginner traders rely on "potential" than fact when they start calculating gains that can occur.
Also, think of your decision-making process in the context of the current market. Right now, we are in a low volatility environment, so it would be better to get out and observe a new set up. Time and experience will show you what approach you should take. Keep a spreadsheet of your trades, the decision you took and watch what the charts did after. That way you might reach an objective opinion not based on gut feeling which is more often than not may mislead. I hope this helps.
(The placement of contingent orders such as a “stop-loss” or “stop-limit” order, will not necessarily limit your losses to the intended amounts, since market conditions may make it impossible to execute such orders)
it depends
look at the context in what you are in
am i in a bull/bear trend
or am i in a bull/bear leg in a trading range
where do i think will be a major support/resistance
why has the trend stopped, is it because there is profit taking/or the bulls/bears have decided that their is value for them to enter
i trade of a 5 minute chart,but sometimes i also tend to have a look at the 1 hour chart. the 1 hour chart can give me direction on the 5 minute chart.
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I say take profit, be happy repeat elsewhere.
Reason...
60% of the time they'll reverse on you.
Time is money, waiting for a 2nd leg wastes money.
You can find another stock that is going to have a run, into earnings or on news with better odds of a profit.
You can always get back in when it starts 2nd leg, generally too late to get out.
Reason...
60% of the time they'll reverse on you.
Time is money, waiting for a 2nd leg wastes money.
You can find another stock that is going to have a run, into earnings or on news with better odds of a profit.
You can always get back in when it starts 2nd leg, generally too late to get out.
If you have not reached your trade target then you should not be concerned with every fluctuation and the only way to ignore the fluctuations is to not watch your trade.
Observe yourself before and during a trade and you will notice how calm and focused you are before the trade and then how irrational and suspicious you become during a trade.
Play a game of chess or do something else, dont watch the trade.
Buy support, sell resistance
If you understand this truism, you 'll be well ahead of the crowd.
It is funny that 95% don't or can't understand this truth.
What does it imply?
If you first leg is a real breakout (high volumes, high interest), of course there ain't resistance on a short term basis. Hold, until you are close to the next resistance. "Let your winners run".
If your first leg is a test, you must take your profits fast because odds are high to test the previous low.
To give you an idea, expect nine times out of ten false breakouts. Prices tend to range a long time before take off.
Concerning the second leg up, wait for a test of the previous low, or at minimum a 50% retracement of the first leg.
CM
which means your method is incomplete and you must research and figure out the additional system which will address that issue to be added to your method
when the solution will be found , it is very possible that your whole method will change, upon which other issue may come up (the law of unintended consequences) and now this issue has to be addressed... that's how any method is developed
you want help from the forum with the ideas...
since nobody knows your method nobody can really help... however anybody solved similar problem was in conjunction with the method at hand, which you do not know and which no one will share with you
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I agree with your explanation but I dont know what you mean with the quote above.
Test or false break or 1st leg is where the problem lies. Too much defining things causes confusion.
Thank you for your coaching professor!I'm glad Beerntrading's answer was the same as Bob's, because I agree so much with both of them.
I certainly agree with that, too (and it's only really a very polite way of saying what Lawrence said perhaps much less politely - I'm not sure I altogether "recognized" your terminology, either, to be honest
).