I have lost count of the number of trades I got out prematurely. Now, I try to be patient still, you cannot be sure 100% that you got out near the top of the move. Picking tops and bottoms is pretty hard. Now, other traders use risk vs reward to determine their exits. If the risk in their trade is $1 and they bought in at $10. The moment it touches $11 which 1 x risk, they sell some shares then, at $12, at $13, etc. Or you can use percentages say the stock goes up 30%, you sell some shares, another 30% or now at 60%, you sell some more shares. These are other traders methods and not mine. My method is different but, I will keep it to myself.
I keep cutting my winners
- Thread starter Wide Tailz
- Start date
Do you have statistics on how cutting your winners too soon reflect in your results?
Are you sure you would make more (or any!) money if you could let them run?
Or is it just an impression?
The goal it to make money, not to make the maximum of money. Letting some dough on the table is normal, as long as you do the same for your losers. You cannot always buy at the lowest and sell at the highest (or vice-versa).
Hi,
This is what some people do when long and in the money.
Close the first half of the position where you normally do and take this profit.
Move stop loss to break even for the other half.
Move the stop loss along with the price (when going in your direction) and set it just below the low of last bar each time a bar prints.
The stop will exit the second half of the position as soon as price turns against you and crosses last bar's low.
Ahh, the long city bus ride strategy,… that and only ramen on losing days, lol.
Our OP with 9 planes is most likely trolling us unless he inherited wealth and doesn’t know how to create it.
Seems like trading is fulfilling emotional needs not financial ones.
When I used to trade equities, managing the giant winners was a nightmare. If I bought something at $10 and it was sitting at $80 it would drive me absolutely nuts and I couldn't sleep. If it pulls back to $55 do I get rid of all of it? Is it going to $500? No matter what I did, 80% of the time it was "wrong" in that I left lots of money on the table or my timing was the absolute worst. I tried getting rid of a percentage as it climbed etc... but I always felt like it was just eating my soul the entire time. Some folks can do this, but I can't. Losing was super easy and I did plenty of that.
I moved over to option spreads. You get these wide windows of profitability and it's basically "a la carte" in terms of what you want to risk/make and the time frames are whatever you want them to be. Options are also not for everyone, but they match my personality and how my mind works. And I sleep like a champ at night.
There are 2 logical places to close a long position.
1. When you aggressively sense the move is/might be over.... trying to top-pick by selling into a high/resistance.
2. When you defensively sell because the upside move pattern has broken.
You need Technical Analysis for this.
Cool, looking forward to watching this.
On another note, here a Tharp Trader Personality Test that takes 5m to outline strengths and weaknesses. It was on-point for me (strategic) but I don't know how many types it's model is based upon. I make no claims nor have gone through any of the content on that site.
ps
For anyone who enjoys reading better than sitting through videos, there are tools that help.
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Rules based trading or By the Seat of your Pants trading.
If trading by the seat of your pants then you might nearly always have regrets about taking profit too early.
Rules based, you followed your predefined rules, eg trailing stop or profit target etc. No regrets, you followed your rules and booked a decent enough profit in accordance with those rules, if it continues to run a-lot after, who cares, that is expected to happen sometimes. Just move onto the next trade..
If trading by the seat of your pants then you might nearly always have regrets about taking profit too early.
Rules based, you followed your predefined rules, eg trailing stop or profit target etc. No regrets, you followed your rules and booked a decent enough profit in accordance with those rules, if it continues to run a-lot after, who cares, that is expected to happen sometimes. Just move onto the next trade..