AMZN was one of many I invested, equally. I am sure you know some of them and don't know others. To add insult to injury, I sold AMZN too soon.
How to maximize profits on a winning position?
- Thread starter qwB
- Start date
Basically, if you have a winning position, trailing stop is something that can help to get even more from it.
I saw you shared the strategy of yours so I can't tell you something really new. Maybe it makes sense to open more positions in the same direction, but risks are increasing in this case.
Just hold it and move the stop, this is the best strategy, almost win-win thing.
I saw you shared the strategy of yours so I can't tell you something really new. Maybe it makes sense to open more positions in the same direction, but risks are increasing in this case.
Just hold it and move the stop, this is the best strategy, almost win-win thing.
Yeah, that's what I meaned with "First part of the sentence can be difficult ofcourse"
I must say I liked the idea from @Bad_Badness, let ARKK do the fundamental analysis for you
Sometimes we do get lucky. I kept MSFT to this day, reinvested all dividends. It covered all of my dotcom losses and then some.
One way to maximize profit when you have a winner is: Don't sell.
Flip the view point: Take the profit when it is furthest away from the EMA20.
You have at least 2 flaws:
1) you are REALIZING the profit at a low point in the trend. Better to take it at a high point.
2) Fixed Percentage trail stops are agnostic of price action. This is similar to basing your decision on PL alone and will not maximize PL. Market does not care about your entry and exit, at small sizes.
There are several ways to optimize the above. Study your charts more closely. See how retraces work. See how climaxes occur. The notion of "let it run until is stops", although true, does not translate to maximum profits the way you are setup.
I leave the rest up to you and if you are serious, the answers are right in front of you. Just "test" your hypothesis by:
Doing at least 50 scenarios:
- Some a trend.
- Some chop
- Some stall then trend
- Some end of trend
- Some Mid trend
- Some start of trend.
- Some complete failure of trend.
- A few, silly wild news driven whipsaws.
Best of luck
A reasonable question for sure. However I think it is critical to exhaust the tools at hand first before looking at pyramiding. I.e. Get the horse before the cart.
For example, the OP, does what a lot of newbies do. They look at a monolithic entry and exit usually based on a single or small set of reasons to entry and exit.
So this begs the question, what happens if those conditions are not met but upon looking at it, even in hindsight, any competent trader would have exited or entered?
The truth, and I do mean truth here, is that there are 1000's of reasons each day to enter and exit. Not only differently full systems, but different tactics based on combinations of TA-PA etc.
So to answer the OPs question, the best exits are based on MULTIPLE reasons not a single one. Imagine you make an entry, and your cohorts with different reason make other entries. When it comes to exit, many will choose a reason that is valid and sound, not only for their system but for other systems too.
Why not use a "totality" of reasons. E.g. one system has a point scoring system for exits. It applies points to each reason, then when the threshold is crossed, and exit process is started.
This should help the OP, but also reveal he needs not one system but multiple ones, and then a harness to integrate them. I.e. there is a lot of work to be done.
The key is to adapt over time. There is no one strategy when markets are evolving all the time. Just make a best guess and trail the profits as long as possible to get the maximum out. Keep your losses small on the other hand and overall it should work.
Actually I think the truth is more subtle. Strategies that are TA-based, with sound risk management and which work on basic principles do work all the time. But not all the time on every market.
I have seen it many times in forex that a great strategy flat-lines or goes into loss on a pair for no chart-visible reason, while it simultaneously starts to perform well on another pair. It's the most frightening thing in trading.
This is a common belief and there is some truth, but when actually are doing the work, be careful of shifting the work from, "Making it robust" to "Make a new system".
It is important in developing, to separate out the framework-tools-libraries and the implementation of the former.
If you have a weak framework, of course, the system will become crap fast. But if you have a robust framework, the implemented system last much longer.
Last edited: