At what point do you start thinking to take some profit off the table?

[java]

You'd be surprised how much better everything goes if you eliminate stops and targets.

 

[Traderjohnsblog]

You'd be surprised how much better everything goes if you eliminate stops and targets.

I agree. I just cant go without a stop. I make them wide but I do use them.

 

[Sam Farmagham]

I agree. I just cant go without a stop. I make them wide but I do use them.

How wide? Say a stock is trading at around 8 bucks and you have 1000 shares of them at that price. How would you do with a stop loss?

 

[Traderjohnsblog]

How wide? Say a stock is trading at around 8 bucks and you have 1000 shares of them at that price. How would you do with a stop loss?

Good question. I don't trade stocks. I trade futures and spot forex. I use the previous support or resistance level and place the stop a few ticks outside of that. As price moves and forms a new S/R level I adjust the stop to not more than breakeven. Most of the time I exit on technicals so I stop adjusting the stoploss at breakeven. I hope that answers your question.

 

[achilles28]

lol I am able to sit on a trade for a week or so, but still if I see around 3% profit, I check out!!!
I do small - steady profits until a giant loss wipes them out.

Okay. So try a month, not a week.

You want you risk:reward around 1:7 - 1:8 minimum.....

 

[murray t turtle]

"Nobody ever lost money taking a profit."
- Bernard Baruch

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Great quote,BB; plenty of truth in that one.And that was WAAAAY before computers+ Investors Business Daily news paper was invented .One NasdaQQQ market maker warned-- plenty of traders went broke taking small profits[ most likely larger losses.....]LOL. B BARUCH was a GOOD QUAIL SHOT, 2

 

[achilles28]

How wide? Say a stock is trading at around 8 bucks and you have 1000 shares of them at that price. How would you do with a stop loss?

Risk half a percent of your total equity, per trade. 0.25% - 0.5% of total account equity.

Say account is 50,000 USD.

250 USD = 0.5% of total account equity.

1000 shares = 25 cent stop = 250 bucks.

 

[achilles28]

I usually hold for a 250-300 point profit, if my emergency stop is 25 points.

Usually I can get my stop down to about 60% of that.

So I'm trying for trades that are 10-20R

That's really key. Seeing it in terms of R.

Risk is always proportional to reward. Bigger risk demands a trader goes for a bigger reward etc.

The key is to get Reward above the 7-8 range....really try to gas it.....

 

[murray t turtle]

Risk half a percent of your total equity, per trade. 0.25% - 0.5% of total account equity.

Say account is 50,000 USD.

250 USD = 0.5% of total account equity.

1000 shares = 25 cent stop = 250 bucks.

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Sounds fine, on the math; A28 since you have been posting, for over 10 years. Frankly, sounds WAAAAAY to big[1,000 x $8.......] for a learning trader- investor.Of course some people value a real expensive education much , much more ......LOL

 

[alfa8]

I agree. Backtesting will reveal much. The problem with profit targets is that they are basically an attempt to protect the future. This is of course impossible. Hence I base exits on technicals. The markets can tell you with resonable accuracy when to exit.

the exit method is well dependent on the trading system you are trading; it could be mean reversion (smaller TP, bigger SL) or trend following (bigger TP, smaller SL); and the volatility of hte market you are trading, and the timeframe..etc.

when you pick an exit method; you ought to backtest it in various market conditions; hence backtesting is a must.

Backtesting does not guarantee the system will work in the future; but it will guarantee that a system that failed a backtest will not work in the future. Hence it reduces 50% of potentially bad systems.