How to sit on winners

[nazzdack]

Quote from Arthur Deco:
.....numberical.....unambiggerous.....efficacious.

Did you listen to a press conference given by Don King, Charles Barkeley and/or Al Sharpton?

 

[Kap]

Quote from gifropan:

I would be grateful to any one who can help me with this aspect of trading. I often have good entry when putting on a trade. I enter in the direction of the trend and most of my trades show a quick profit. What happens when the market starts to hesitate and comes back a bit ( I am sure you all know what I mean) and stalls for a period I jump out only to see the market continue to go a lot further in my direction. To compond the problem I re enter in the same position after what I see a correction higher up and that is when I get stopped out. The net result is that the price i get stopped out at is a lot higher than my original entry but I end up either breaking even or loosing money. I find it very difficult to sit on a trend and not to be swayed but ebs and flows in the market. My trend indicators remain intact. I know it is fear that causes this but how can I fight it?

If its giving you the fear, then its likely giving others the fear, and you want to be on the otherside of the weak fearful herd. So use your emotion as your own market indicator. Conversely if you find your selve euphoric and start basking in your chair admiring your PnL its time to get flat.

 

[BSAM]

Quote from gifropan:

I would be grateful to any one who can help me with this aspect of trading. I often have good entry when putting on a trade. I enter in the direction of the trend and most of my trades show a quick profit. What happens when the market starts to hesitate and comes back a bit ( I am sure you all know what I mean) and stalls for a period I jump out only to see the market continue to go a lot further in my direction. To compond the problem I re enter in the same position after what I see a correction higher up and that is when I get stopped out. The net result is that the price i get stopped out at is a lot higher than my original entry but I end up either breaking even or loosing money. I find it very difficult to sit on a trend and not to be swayed but ebs and flows in the market. My trend indicators remain intact. I know it is fear that causes this but how can I fight it?

Let's cut to the chase here:

1. Take some shares off the table with a small profit (since you state that most of your trades show a quick profit).

2. Set your stop loss, then stick with it!

3. When Jack Hershey baits you with a question, don't respond.

4. You state that you know it is fear that causes your problems and that you want to know how to fight it. (By following steps 1, 2, 3 above.)

Remember, only you can prevent forest fires; and only you can prevent burning up your account.



There. Now, send a check to Baron, made out to BSAM. I'm sure he'll forward it to me.

 

[shitzfagiggles]

Quote from jack hershey:

Do you want to know the specific errors you continually make?

Jack never makes errors because he never trades

 

[LeeD]

Quote from spindr0:
What's wrong with most of your trades having quick profits? Book them and look for more positions (don't re-enter).

Orrr, scale out. Take some profits on the initial correction. If the underlying continues down, stop out at least by breakeven on the balance. If it reverses and heads back up, no problem.

Trading involves losses. Good trading involves keeping the losses small and either having lots more small winners and some occasioanl larger winners. Forget about perfect trading. Take what they offer.

I second every point of this advice.

Regarding scaling out, if you close part of the position at a profit and move stop-loss to break-even or very small profit, you have effectively a "free" trade. There no downside any more, only upside.

Remember that watching substantial profit evaporate or even turn into a small loss is a part of trend-following. That's the cost of staying in a trade.

Quote from gifropan:
To compond the problem I re enter in the same position after what I see a correction higher up and that is when I get stopped out.

I understand you do it because because you are afraid to miss a good trade. The next time you feel tempted to do this think of the potential downside. If you go long at a new high, the price may go all the way to the previous low before the trend continues. Are you prepared to have stop-loss this wide? Are you happy to take a loss if the trend happens to be over? If the answer to any of these questions is "no", it's better to wait till the next time the right set-up comes into play.

 

[Redneck]

OP,

A colleague asked me essentially the same question a week or so ago – I’ll tell you the same I told them….

Nut Up

Now I suppose you want more insight to what I mean…..


Do you log your trades…

Does the analysis of your log show your entries to be correct – meaning…


You enter, price retraces (where you’ve said you get scared and exit) then price returns in the direction you entered – more times than it doesn’t – and obviously within the time frame you are trading

If it does your entries (direction wise) are correct and only timing is off a bit …

If it does not – you have every right to be nervous and exit – and obviously it is time to reevaluate the when, why, and direction – of the trades you’re placing.


In your original post you’ve basically said it does…, that your entries are solid, but your timing is off a bit – and now what you need an easy answer to the mental (emotional) road block you are having

Well there isn’t one….


Either believe the conclusions you’ve drawn from your log analysis (the facts), which also means you believe in yourself, and in your actions / the trades you’re entering (after all aren’t you the one who placed the trades in your log that show your actions (trades) to be correct) – or you don’t

Whevever faced with the facts - our only choice is to nut up…. Or not

Now trade the facts – or ignore the facts and trade your emotion – your choice

Trading perfection is not the goal, trading excellence (which includes emotional control) is



btw

I told my colleague to nut up because I know their entries are correct more times than not – by a huge factor


RN

 

[Lojanica]

Quote from R. Raskolnikov:


My advice is to forget about perfect timing and focus on "being right". Meaning your on the right side of the actual move and don't concern yourself about the minor shakes and quick fluctuations. Cover your P&L and just focus on where price needs to go to validate or invalidate your trade.

If you find yourself consistently affected (negatively) by these shake outs, instead of stopping, add more. This is ONLY if you have a solid structure and are just being scared out of trades arbitrarily. Use these situations to your advantage. If your system is good, not only will you be able to hold for the real move, but you'll have a larger position and a better price. A minor shift in thinking can bring about major results.

This is very good avice but I'd like to reenforce the only if you have solid structure.

Trading is about solid structure and big balls.

 

[GE2009]

Read Trading in the Zone. It will help you realize and hopefully conquer your fears. It helped me.

You need to find your market's noise, or typical range of movement given your time frame. If it is 5-6 tics, then if it moves that distance, think about exiting or scaling back...but it is time to manage your trade at that point. Always have an exit point in mind, and when you get there, determine your actions.

 

[wst]

"What happens when the market starts to hesitate and comes back a bit and stalls for a period I jump out only to see the market continue to go a lot further in my direction."

= fear , emotions distracting you from following your trading plan

You need to learn yourself of good ol' iron-fist discipline my young man.