How do I get over wanting to "hit home runs?"

[Pa(b)st Prime]

Quote from illiquid:

That seems pretty normal.

Let's assume your first case is a long position; whatever factors that are getting you to sell out "early" (in retrospect) are the same factors that are luring others into selling/shorting the move. This will amplify the trend higher as they collectively discover they are wrong.

The second case is just the inverse; the conditions all look and feel like a possible home-run, not just to you, but to everyone else taking the same position. So the vulnerability of price is in the move opposite to what all the "semi-pros" feel, that is par for the course.

Very insightful post.

 

[HedgefundTrader2]

Quote from IronFist:

Every time I cut a profit early it turns into what would've been a 40-50+ tick monster trade.

Every time I hold out for more, my 10 tick profit turns into a loss.

I don't really have issues holding onto losers thinking they'll turn around. I think I am pretty ok at cutting losers.

My problem is with cutting (or not cutting) winners.

Tick chasing will not get you rich, simple as that.

 

[eagle]

Please correct me if I'm wrong on the below remarks highlighted in blue.

Quote from illiquid:


Let's assume your first case is a long position; whatever factors that are getting you to sell out "early" (in retrospect) are the same factors that are luring others into selling/shorting the move. This will amplify the trend higher as they collectively discover they are wrong.
Slow upward movement.

The second case is just the inverse; the conditions all look and feel like a possible home-run, not just to you, but to everyone else taking the same position. So the vulnerability of price is in the move opposite to what all the "semi-pros" feel, that is par for the course.
Quick upward movement.

 

[IronFist]

Wait a sec.

This whole "selling half after x ticks profit and letting the other half ride with a stop loss set at entry + 1 tick..."

I was thinking what an awesome idea that is until I realized that in addition to increasing your winners, it's also going to DOUBLE your losses.

The only way it would also double your winners is if, after you sell half your position, the remaining half went up twice as far (ie. sell first half at +5 ticks, sell second half at an additional +10 ticks (+15 from entry)).

So wouldn't this strategy end up lowering your P/L?

 

[nevadan]

Wait a sec.

This whole "selling half after x ticks profit and letting the other half ride with a stop loss set at entry + 1 tick..."

I was thinking what an awesome idea that is until I realized that in addition to increasing your winners, it's also going to DOUBLE your losses.

The only way it would also double your winners is if, after you sell half your position, the remaining half went up twice as far (ie. sell first half at +5 ticks, sell second half at an additional +10 ticks (+15 from entry)).

So wouldn't this strategy end up lowering your P/L?

Depends on your accuracy. Assume 30% losers. On two contracts and a six tick stop loss, then three losers = -36 ticks. If the remaining 7 trades go for six ticks and scratch the second half you have 42 ticks. If you are scalping you can't have a 50% win loss ratio. The whole idea requires that you can generate a profit with one contract consistently.

 

[Jayford]

Quote from IronFist:

That's the other thing I was thinking about doing. Of course, I can't really cover half if I'm only trading one contract



Do you use bracket orders for this? Or do you watch everything like a hawk?

I just watch and move stops. ya don't want a bracket on a running profitable trade as a spike in your direction takes you out (unless the LIM is way up there).

I keep moving the stop, and place a LIM exit at any obvious supp/resis in my way. Usually.