How to learn to take profit?

Quote from LeeD:


The reason I call this problem psychological is I notice when a trade is in the money I often refuse to accept that the price is forming a new support/resistance level and unwind... even if the price is a tick or 2 away from my target.
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Take a look at your risk reward;

If you start with a 1 to 2 risk reward ratio so that you are risking one dollar to make two, when you get to within 10 cents of your target you are now risking $2.90 to make the last 10 cents if you let the price hit your original stop.

Consider trailing stops when you get past break even or within a certain % of your original target.
 
Quote from deaddog:

Take a look at your risk reward;

If you start with a 1 to 2 risk reward ratio so that you are risking one dollar to make two, when you get to within 10 cents of your target you are now risking $2.90 to make the last 10 cents if you let the price hit your original stop.
More...
That's true, but also consider the opposite situation where you get to within 10 cents of your stop. At that point, you're risking 10 cents to make $4.40. That would be a 1 to 44 risk/reward ratio. If you wouldn't enter a position with that kind of risk/reward ratio, then why stay in the current trade? I guess it's a little like poker when you have money in the pot and figure it will cost you only a little more to see if you were right. Comments anyone?
Quote from deaddog:
Consider trailing stops when you get past break even or within a certain % of your original target.
More...
Worth looking into.
 
I have an indicator I call my "get the hell out" indicator. Of course I have to wait for the bar to close to get it's true read. However, when prices fluctuate around the get out price it will flash (red). Waiting for the bar to finish is like watching a tree grow. There is another wrinkle to this indicator. 83% of the time prices will continue in the same direction or at lest test the previous high or low IF the NEXT bar reverses it's (the indicator) reading. Another consideration is that testing proved prices will pull back 50% into my trending bars 57% of the time and 100% of the bar 9% of the time and continue on. This gives me an opportunity to add to my position if I feel confident (yeah right). The strength of the trend was already mentioned and I certainly agree. However, it takes only one panic stricken trader anywhere in the world to push a single button and we're off to the races. If prices are sitting on a significant support or resistance level (obviously) or a HOD or LOD this can be the most profitable trade of the day (stop running). I'm a futures trader so the dynamics of my example may be worthless on an individual stock. The idea I'm offering is know your market.

IMO,
A: Most new traders jump from market to market looking for quick and easy profits (there ain't none), losing money here and there and never really learn to trade at all.
B: The most profitable trades are the hardest to take.

Test, test, test.

<*)))><
 
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