How do you guys combat FOMO and take profits when should

  • Thread starter Thread starter 3acor
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3acor

Hey guys,

I have this problem where I enter a trade with a profit target in mind. Now for some reason the stock reaches a point where it looks like it won't move my way anymore and so I have to get out and take my profits. For some reason though, I don't do that as I fear taking profits and having the stock just moving my way again and missing out on big gains.

Did any of you ever faced that, and how do you combat it?
 
3acor said:
Hey guys,

I have this problem where I enter a trade with a profit target in mind. Now for some reason the stock reaches a point where it looks like it won't move my way anymore and so I have to get out and take my profits. For some reason though, I don't do that as I fear taking profits and having the stock just moving my way again and missing out on big gains.

Did any of you ever faced that, and how do you combat it?
More...

I take half off.
 
This is because you are missing the "exit" as your strategy. Your exits are based on gut and intuition.
Have a more technical and quantitative approach, that way you will not care what it does after.
 
MattZ said:
This is because you are missing the "exit" as your strategy. Your exits are based on gut and intuition.
Have a more technical and quantitative approach, that way you will not care what it does after.
More...

Thanks, my exits are based on previous close, HOD, LOD, premarket areas, intraday and daily support resistance.

The problem is that a lot of times there are sudden big iceberg orders where they won't let the stock move the way it should and I get too stubborn to get out
 
3acor said:
Thanks, my exits are based on previous close, HOD, LOD, premarket areas, intraday and daily support resistance.

The problem is that a lot of times there are sudden big iceberg orders where they won't let the stock move the way it should and I get too stubborn to get out
More...

I don't want to sit here and give you advice such as "be more disciplined" because that is the advice that paper trader resort to. Instead, keep stats on the times that you exit according to plan and when you not. When the sample is large enough and you see the numbers it does knock sense into you. Stats don't lie, Intuition cannot be quantified and it's a self liar ( to one self).
 
I find that when the news reports my insights, it is time to take.

Example: AAPL: I recently foresaw that smartphones would become an issue of “National Security,” I.e. AAPL is dead in China.

I went up about 17% on a short. Then, some China correspondent on Bloomberg reported that insight.

Time to ca$h out.
 
Who said trading was that easy.

Aim to catch 50% of the FOMO targets, rest of the 50% you have already locked in profits, so it should be decent returns.
 
Failing to take profits has been my downfall with numerous strategies. I can't fault the strategies, I usually picked the right target and got the direction right and the entry was most often positive. But so many times I watched profits disappear into the red.

Now my rule is to close a position as soon as it reaches a chart point at which I would be able to enter if I wasn't already in. Typically, this will be in a trend, when price makes a small pull-back.

For example, price in an uptrend is making bars with consecutively higher daily highs. It then prints a bar with a lower daily high. I exit at the close of that day's session and set a new buy order at the day's high. If the pull-back fails the next day and price goes higher I am back in the trend: if it does not and prints a second day with a lower daily high, the order is not triggered and I simply move it lower to the second day's high.

A second rule is to close a winning position in an uptrend when price has made 5 consecutive higher daily highs - these days in forex prices rarely make 6 or more consecutive higher daily highs in an uptrend or lower daily lows in a downtrend. Almost for sure there will be at least a 24 hour pull-back coming the next day.
 
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