Exiting Positions

I am always amazed by the contradiction of people saying that market is not predictable and at the same time they try to predict a target by fixing a fictitious risk/reward hee hee !

Today the maximum of bearish target was 8874 (see http://www.elitetrader.com/vb/showthread.php?s=&threadid=19259&perpage=6&pagenumber=6) could you guess it only by intuition ? if yes you are a genious then. As for myself I can't I must use calculation because if I followed my intuition I would be as lost as any novice - which I was at the beginning 8 years ago.

If you can't predict target with enough consistency it's really preferable not to try to use any target at all and use another framework which is consistent with your approach (calculating a risk/reward ratio based on pure fictitious number is useless). As I said what counts is not gathering some trading rules from here and there it is to have a coherent framework, if you mix several frameworks you will only get inconsistencies. As for myself I don't use stochastic framework anymore but if you use it stick to it and don't try to predict since you can't really.
 
Quote from greenleaf:


I appreciate your reply. I size my position based on this formula:

size = equity * risk / ADR

In my case, I use a risk % of .02. I then take the minimum shares of this, or 20% of my account buying power, or $30,000 right now (with margin). So generally, I'm in positions for 300 or 400 shares.

I hold my positions for a minimum of overnight (since I am a PDT victim) and preferably less than a week.

-- DG
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You have to interpret everything in relation to your timeframe. The adage "let profits run" is basic to good trading, but it means different things to different people. For a daytrader, it might mean a $.20 move and get out at the first hint of resistance. To him, not letting profits run would be taking a $.05 profit.

You have decided on a timeframe that basically is as short as the PDR allows. So you are one timeframe ahead of the daytrader, but short of the typical swing trader. On this timeframe you really cannot afford to handle a pullback because a typical two day pullback will probably stop you out. Given your typical trade size, I think $200-300 profits are nice trades, particularly if your win percentage is high. You have to accept the fact that many, indeed most, exits will not be optimal. This is a probabilistic game.

It is useful to have rules for exiting. That way you are not forced to make a decision every time, you just see that a rule is triggered and act. My most important rule is not to let a profit go to a loss. Another is not to give up more than half of a big profit.

One common approach is to use a trailing stop. I don't like it, as you are always getting out on weakness. It does give the stock a chance to run however. There are lots of technical signals you can use on the 5 or 60 minute chart to alert you that a stock has lost momentum.

The main thing is to realize you are a trader, not an investor, and a trader is quick to ring the cash register. Ka-chingo !!! Gotta love that sound.
 
Thanks to everyone who took the time to respond to this thread in the last 24 hours. I have a lot of new ideas to distill, and am looking forward to doing so.

It looks like things got a little passionate there for a while this afternoon.

Today I ended up $560 in three positions I bought (RMBS, LEND, and UNTD) and will close one or more of them out tomorrow morning if the market doesn't continue its mini uptrend started this afternoon.

-- Dickie Greenleaf
 
I am a realitively new trader and not qualified to answer your questions, however I have watched this "flame throwing" repeat itself over and over again. My only coment is that Jack has been helping me learn a system to trade the E-minis. It is aswome and he is a great teacher. He is however very hard to understand. It took me a while before i could understand; and, I ALWAYS have to read what he writes multiple times. His stuff works however. I have not seen that from any of the naysayers. I would simply put forth that the people who attact him simply do not understand what he is saying. To be honest I don't know how anyone could expect anything that really works well to be easy to learn. good luck and i recomend putting forth the effort to learn his lanquage. if you try he is very patient and will help you along.

BL
 
Quote from greenleaf:

Thanks to everyone who took the time to respond to this thread in the last 24 hours. I have a lot of new ideas to distill, and am looking forward to doing so.

It looks like things got a little passionate there for a while this afternoon.

Today I ended up $560 in three positions I bought (RMBS, LEND, and UNTD) and will close one or more of them out tomorrow morning if the market doesn't continue its mini uptrend started this afternoon.

-- Dickie Greenleaf
More...

thanks for listing a sample of your holds.
 
Sell on RMBS. Vol, STOC are signals. and right now.

hold on LEND, do not expect more than 23 minus as price peak.

Sell on UNTD, it is in low volume lateral channel on the high side. was not a buy since 24JUN03.

i do not know when you pbought these

I only see a buy on LEND on 1JUL03 and buy is based on inside bare after the failure to BO down. rising price on the low volume is great sign.
 
Quote from jack hershey:

Sell on RMBS. Vol, STOC are signals. and right now.

hold on LEND, do not expect more than 23 minus as price peak.

Sell on UNTD, it is in low volume lateral channel on the high side. was not a buy since 24JUN03.

i do not know when you pbought these

I only see a buy on LEND on 1JUL03 and buy is based on inside bare after the failure to BO down. rising price on the low volume is great sign.
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I monitored on 30 chart.
 
Quote from CrescitEundo:

His stuff works however. I have not seen that from any of the naysayers. I would simply put forth that the people who attact him simply do not understand what he is saying. To be honest I don't know how anyone could expect anything that really works well to be easy to learn.
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You may think it works, but what's working is you. Jack's approach is no different from any other which requires you to adopt those behaviors which are characteristic of disciplined traders. There are plenty of strategies which will provide the same or better results without forcing you to go through the torture represented by Jack Hershey.

As for easy and simple, trading should be as simple as possible, but that doesn't make it easy. You're not giving yourself enough credit.
 
Quote from CrescitEundo:

[Jack Hershey] is however very hard to understand. It took me a while before i could understand; and, I ALWAYS have to read what he writes multiple times. His stuff works however.
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My take on Jack Hershey is that, as most people are when they've lived quite some time and have found something that works for them, they get set in their ways as they become a strong proponent that their way is the only way to do it. "My way or the highway" is the way my dad used to phrase it. He made millions in the market but boy was he obstinate against this and that... things that could've, wouldv'e made sense to do.

So Hershey's stuff reads like Nostradamus meets Lewis Carroll with typos and so people poke fun at him on that level. Others have another beef with him on another level. He knows it, maybe he goes off a bit sometimes, and sometimes maybe he doesn't, but whether it bothers him or not, tell ya what: If you get something out of his posts and it works for you, then that's wonderful and that's the idea.
 
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