Re-entry after profit-taking

[SunTrader]

I hear ya there, but by the time I'm sure what shouldn't have happened happened, as you nicely put it, I've usually given back enough already that I may as well just stick with my original stop. I'm just trying to find some way around that problem.

Well then you've got work to do on plan and analysis. The alternative is to be stuck on the hamster wheel.

 

[Dollardogs]

Is that the hamster wheel of bad discretionary decisions?!

 

[Dollardogs]

My two cents, it depends on what kind of trader you are/want to be; what can you comfortably/enjoyably handle emotionally...

I prefer scale in/all out at my target unless PA says to get out before it hits. If context and PA are good, and I didn't just get out at a swing target then I'll get back in on smaller size. I wouldn't recommend that to someone asking this question though.

If I exited at a swing target I might get back in, but it probably isn't going to be in the same direction.

Getting back in at smaller size is an interesting suggestion too. I think you're right that it's ultimately gotta suit me. My discretionary exits generally suck which is why I systematized them, but I'm just tired of giving back so much in choppier markets I guess.

 

[HuntingBenjamins]

The last time I reenter after profit taking (AKA FICKLE MINDED TRADING)
was more than a decade ago.

Since then, I don't do such a thing.

I’ve done it a few times and in every case it went the wrong way. I'm in one now where I mistook it for a 2nd run. Instead it tanked to a 52 week low. I’m still work in my way out of it. Rookie mistake is what I’m calling it. Won’t be doing that again…(at least try not to)

 

[volpri]

Daytrading question I'm really stuck on related to profit-taking, and the perennial catch-22 of "letting runners run" without giving back too much of your profits when the runners come up lame. What I'm wondering is does anyone here employ a re-entry strategy to work around that problem?

What I'm envisioning is very simple. As soon as you enter, you determine the expected spot of strongest resistance. You exit as soon as that spot is hit. If you were right, and it reverses to where your initial stop woulda been, then you're a genius! You basically guarded all of it. If it looks like you're wrong, and it busts through resistance, then you re-enter, but only risk back to your original stop as though you'd never left the trade.

Result: on all the trades where you were right to exit, you're basically guarding 100% of possible profits. On all the ones where you were wrong to exit, you've at least re-entered to catch most of the remaining move. And on ones where you're fooled into re-entering but it reverses on you anyway, you still close out at a profit, perhaps slightly smaller, assuming your re-entry was at a slightly worse price than your exit point.

Curious if this kind of re-entry approach has a standard name? Do you think it's the worst of both worlds or the best of both worlds?

For context, I daytrade QQQ, and I'm worried that I'm just asking too much from the moves QQQ has in it. My entries are conservative to begin with, so I tend to enter fairly late into moves, and then my stop method is wide enough to "let runners run." It works like a charm when they do run, but I have too many trades where I'm up about 100 or even 150 cents, and my stop loss lets it run all the way back to break-even. These trades piss me off more than a loss.

Well now I advocate “grab that money.” I can always re-enter. The market probes back and forth all session long. If bars are large enough I will enter and exit multiple times on 5 minute bar. I don’t trade like most people. I will also average down. To make matters worse LOL I will martingale in certain situations.

What makes all this work is the continual probing of the market back and forth. The market moves to where more transactions will take place.

But see I am a scalper of 1 to 8 points per trade in the ES. The day session offers many opportunities to do what I do.

I go with the flow grabbing as things move.

 

[TheMordy]

Imo, a robust and steady trading plan is more important than some $$.

Meaning, if after your exit, the chart fits your trading plan, then trade it anyway the regular way.

But if after taking profit or breaking even, the chart continues climbing, but is not fitting your regular strategy for placing a regular trade, then for your long term money management sake -> Don't 'chase' $$ !

I don't believe chasing $$, even if successful, pays out long term. It slowly slowly changes your mindset from a disciplined trader, to a $ gambler....

Mindset is the most valuable asset of a trader !! (imao)

 

[Laissez Faire]

The answer to this question (and others) will be found through studies, testing and research of your chosen market, not random answers from random people online who may or may not have a clue about what they're talking about.

If you're trading the larger swings of the day, you can choose to hold through retracements or you can choose to break the larger swings into smaller swings (trades) with exits and re-entries if you have a methodology which validly can recognize and exploit those micro moves.

 

[Dollardogs]

All of this makes sense, thanks fellas! I guess I'm striving for something in-between all out scalping and daytrading. I average 3 trades per day where I hope to catch the longer all day moves and ride out the noise, but I gotta acknowledge my strengths and weaknesses: balls out scalping doesn't suit me, but neither does the fully patient riding out of every larger pullback. I really gotta master telling a PB from a reversal, but unless it happens at an area I've identified as key S/R I'm just guessing every time and usually wrong. Increasingly convinced it can't be done without the context of where it's happening.

 

[PPC]

I would not recommend to re-enter if you’re day trading and if you have a tendency to enter fairly late into moves. The reason is that because the later you enter, the closer you’ll be to the daily range which one always need to keep an eye on when intraday trading (unless you trade VLTF where the ATR is not a factor). Only you can answer that.

Also, if there is no pattern (your edge) at that (re-entry) price level, then all you’d be doing is leaning on the edge that occurred X points before your re-entry level. It doesn’t sound like low-risk entry.

How about just scaling out, and keeping on a runner?

Or maybe consider a to re-enter with much smaller size ONLY if there is a tight consolidation after thrust (i.e.: a continuation pattern), and the market dynamics are strong, and there is still lots of room left in the daily range, etc, Otherwise there would no edge in it.

 

[virtusa]

Daytrading question I'm really stuck on related to profit-taking, and the perennial catch-22 of "letting runners run" without giving back too much of your profits when the runners come up lame. What I'm wondering is does anyone here employ a re-entry strategy to work around that problem?

What I'm envisioning is very simple. As soon as you enter, you determine the expected spot of strongest resistance. You exit as soon as that spot is hit. If you were right, and it reverses to where your initial stop woulda been, then you're a genius! You basically guarded all of it. If it looks like you're wrong, and it busts through resistance, then you re-enter, but only risk back to your original stop as though you'd never left the trade.

Result: on all the trades where you were right to exit, you're basically guarding 100% of possible profits. On all the ones where you were wrong to exit, you've at least re-entered to catch most of the remaining move. And on ones where you're fooled into re-entering but it reverses on you anyway, you still close out at a profit, perhaps slightly smaller, assuming your re-entry was at a slightly worse price than your exit point.

Curious if this kind of re-entry approach has a standard name? Do you think it's the worst of both worlds or the best of both worlds?

For context, I daytrade QQQ, and I'm worried that I'm just asking too much from the moves QQQ has in it. My entries are conservative to begin with, so I tend to enter fairly late into moves, and then my stop method is wide enough to "let runners run." It works like a charm when they do run, but I have too many trades where I'm up about 100 or even 150 cents, and my stop loss lets it run all the way back to break-even. These trades piss me off more than a loss.

All depends on your qualifications as a daytrader. It can go from full disaster till skyrocketing profits. I do it almost every day. When I have time I will show with an excel some example later. Now trading , so no time now.