Help with exit points for swing trading (pic)
- Thread starter IronFist
- Start date
I'd have booked atleast partial profits when the price approached the bollinger band ; allowed the balance position to ride but would get off before the price returned to hit break-even.
Be stingy with your money & keep banking profits whenever available , especially when you're a newbie.
Be stingy with your money & keep banking profits whenever available , especially when you're a newbie.
What put you into this trade in the first place? What is your strategy?
Thanks. That sounds like a good idea, actually. However, I don't think right now I can take partial profits because, as I said, I'm a newbie and I don't have that much capital to begin with so much of my partial profits would be eaten up by comission.
Maybe I should trade bigger positions and use tighter stops?
I initially made this trade because of the reasons I mentioned in my first post (indicators, price relative to MA, etc.). I was planning on trying to get about 10% and selling when it hit the upper price channel.
Just a couple of thoughts for you.
1. A 10% profit target is a BIG target to reach for, unless you are willing to regularly hold a trade for a long period. If you are going to dedicate yourself to swing trading, 4-5% is a more realistic expectation, unless you are willing to tie up capital for long periods.
2. If you are serious about trading, you need to backtest entries and exits to see what works over time, and where the statistically significant levels are.
3. You will never call tops and bottoms. Can't be done. Your goal should be to take a piece of each move, then go on. How much to take, when you get in and get out, can only be answered by studying the probabilities. If you can't do that, then you'll always be in a game of guessing, and that's not a good place to me.
4. I buy pullbacks and I've gravitated toward a standard three day holding period. After years of trading and backtesting, I've found that in three days I'm going to take the major chunk out of most moves, and beyond that my capital is better in cash or deployed in other trades. I will override that if a stock is really taking off on high volume, but I watch it closely and pull the trade on the first hint of an intraday stall. Even so, I often leave a lot of money on the table, but that's the biz. I'm happy to bank profits and move on. This is not a business of looking back.
5. As soon as you have the capital, you must diversify your swing trades. Being in one trade is always dangerous. When you're diversified, your losers one day will be offset by your winners, provided you have a solid strategy.
Hope this is helpful. Bottom line, don't trade unless you have a plan to exit, and have a solid reason for the plan.
If my partial profit doesn't add up to much, then I'd close my trade as soon as I make reasonable profit on the position.
Taking what the market gives and ringing in consistent winners helps one's confidence in the long run.
I'd increase on trade size , only after I've convinced myself about the effectiveness of my edge.
Taking what the market gives and ringing in consistent winners helps one's confidence in the long run.
I'd increase on trade size , only after I've convinced myself about the effectiveness of my edge.
Well, it took a month, but who saw N today? 
Is a month considered a "long" time for a swing trade?
I don't know. I'm just happy I didn't lose money. That's the spirit, right?
Oh, I put in a trailing stop. I'll risk a % or two in order to possibly ride a winner.
Too bad it won't be 10% after comission and tax.
Is a month considered a "long" time for a swing trade?
I don't know. I'm just happy I didn't lose money. That's the spirit, right?
Oh, I put in a trailing stop. I'll risk a % or two in order to possibly ride a winner.
Too bad it won't be 10% after comission and tax.
Don't take any of them too seriously.
Hitting the exit is an easy shot
Try thinking about money management. My view of money management is optimising the continuing money velocity of your portfolio.
You do this in one basic way.
What you own is going through an increasing money velocity after entry (you do not know how to enter it turns out). The holding may peak in money velocity. But the test of holding it is simply whether or not the invested capital is making more money that all the potential investments you have lined up to replace it when it fails to keep a high money velocity.
Cross over trading goes like this:
You hold a portfolio and compare money velocities with the list of candidates you have.
When any holding begins to fade and reaches the level of the increasing money velocity of the candidates, you switch from the owned (exit) and promptly enter the best rising money velocity candidate.
You may be able to picture it as a series of arcs on a graph of the first derivative of accumulating profits.
This gives you a few guarantees as you notice. You never see any failures to perform in your owned portfolios. You do not deal with drawdowns any more. You are always prepared. Your list of potential buys are always "proven". Both the entry and exit analysis stuff you do now is off the table. All you do it monitor money velocity and assure everything is at the available upper limit of money velocity for the condition of the market.
There are some size limitations. At the upper ranges of making money as an individual, you have to deal with partial fills. The ratio of entries to exits is 20 to 30. This means that it is easier to enter than exit in terms of time constraints during the day. So learn to leave some money on the table to establish more rewarding entries. This means do more than 30 blocks to exit to be able to ace the 20 blocks of entires required with the partial fills. Never show your hand with trades and do not worry about who is coattail trading you.
You didn't get much good advice so far.
Some common money velocites in today's markets are
4.5 and 5.5.
These are measures of money made per unit time.
For equities, unleveraged, 4.5 means 4.5% of capital per trading day.
You calculate the last five cycles of profits for each candidate. It is the average cycle range divided by the average days of hold. You can see that. And an answer like 4.5 means that over the last five cycles the stock has done 4.5% a day during each hold.
Naturally you do no hold for the whole half cycle; you only hold it as long as it is doing better than all other available candidates. While you hold it is is making a lot of money each day you hold it.
Graphs are use to prepare and to visualize the available mapping space in the near term future. You project the envelope of continuing profits that are being made.
With these boundaries annotated and the pile of candidates stacked up with the best on top , they are simply compared to the pile of stocks in your portfolio with the best ones on the bottom and the worst ones on the top.
You look at the top of both piles and decide to transfer money from one pile to the other stock by stock day after day. This is known as paper shuffling in the sense of always just killing the market continually.
As you beging to do this a given stock may appear periodically on one pile or another. Candidate to owned, candidate to owned.
For beginning people the share numbers for three cycles with a given stock will look like 300 ,space of time, 400 space of time and 700.
Count on doubling your capital every eight consecutive cross trades. The period of trade for one cross trade cycle is several days currently.
Roughly speaking, you are at a point where you can now spend some time learning to make money. Up to this point you have just been fooling around and fooling yourself.
4.5 and 5.5.
These are measures of money made per unit time.
For equities, unleveraged, 4.5 means 4.5% of capital per trading day.
You calculate the last five cycles of profits for each candidate. It is the average cycle range divided by the average days of hold. You can see that. And an answer like 4.5 means that over the last five cycles the stock has done 4.5% a day during each hold.
Naturally you do no hold for the whole half cycle; you only hold it as long as it is doing better than all other available candidates. While you hold it is is making a lot of money each day you hold it.
Graphs are use to prepare and to visualize the available mapping space in the near term future. You project the envelope of continuing profits that are being made.
With these boundaries annotated and the pile of candidates stacked up with the best on top , they are simply compared to the pile of stocks in your portfolio with the best ones on the bottom and the worst ones on the top.
You look at the top of both piles and decide to transfer money from one pile to the other stock by stock day after day. This is known as paper shuffling in the sense of always just killing the market continually.
As you beging to do this a given stock may appear periodically on one pile or another. Candidate to owned, candidate to owned.
For beginning people the share numbers for three cycles with a given stock will look like 300 ,space of time, 400 space of time and 700.
Count on doubling your capital every eight consecutive cross trades. The period of trade for one cross trade cycle is several days currently.
Roughly speaking, you are at a point where you can now spend some time learning to make money. Up to this point you have just been fooling around and fooling yourself.