Riding Winners

[trader_404]

Quote from Redneck trader:


You have setup(s) to enter a trade/ position (I assume)

Why can�t you use the same setup(s) to exit a trade (

RN [/B]

I second this. It makes complete sense to me that if you put on a long position at Support, which just means you expect other people to buy there also, that you look to unload that long into resistance, or where you think people will be selling also.

So if you are long, and you notice price is currently looking like a good short opportunity, your probabilities are now higher that the long will not continue to work. It doesn't mean it won't continue, but you always have to decide real-time what your odds are throughout the day at different price levels.

 

[Gabfly1]

Quote from wyndtrader:

...I would be interested in hearing how people have successfully solved this problem in their own short-term trading, especially in terms of how much you allow the market to drop before exiting (do you make allowances for volatility), do you raise your stop-losses as your position becomes profitable, and do you exit a position all at once, or cut back as you perceive the position to become more risky.

Thanks in advance,

wyndtrader

Scaling out. The where and when are dependent on your specific method and trading style, and can only determined by you through observation and testing.

 

[Redneck]

Quote from Redneck trader:

And here’s another way – no better or worse – just different


You have setup(s) to enter a trade/ position (I assume)

Why can’t you use the same setup(s) to exit a trade (while also simultaneously identifying a new trade/ position)

A bit counterintuitive no doubt - and it requires you remain absolutely objective


Your ("riding winners", aka taking profit) should always match your trading style – with the option of remaining in longer should you get a sudden windfall – I believe (otherwise you're getting greedy and that'll kill a trader quicker than you can blink)



BTW – The divide by 2 also works well - as long as you can stand the initial risk and are willing to lose it



Regards

RN

One amendment to my post if I may – so as not to confuse anyone

I am not advocating being “in the market” all the time


Flat is just as viable a position – as short or long – 100% of the time


Regards

RN

 

[No.Heat]

Quote from Redneck trader:


Why can’t you use the same setup(s) to exit a trade (while also simultaneously identifying a new trade/ position)

BTW – The divide by 2 also works well - as long as you can stand the initial risk and are willing to lose it

Hi RN,

Couple of comments.

Using identical entry as exit assumes every turn has your signal, something to consider. Not sure about your signals but mine certainly does not exist in every market gyration.

You mentioned initial risk and are willing to lose when talking about divide by 2, not sure I understand, every entry comes with risk, care to clarify?

Best of trading,
No Heat

 

[Redneck]

Quote from No.Heat:

Hi RN,

Couple of comments.

Using identical entry as exit assumes every turn has your signal, something to consider. Not sure about your signals but mine certainly does not exist in every market gyration.

You mentioned initial risk and are willing to lose when talking about divide by 2, not sure I understand, every entry comes with risk, care to clarify?

Best of trading,
No Heat

Howdy Sir

I just didn’t want to OP to mistake doubling his/ her initial position – then taking half…, as opposed to entering standard size then taking half
(It is a very solid method no doubt)


Great 1st point as well – and something all should absolutely consider if trying it (eta - I tend to stick to the same stocks over, and over, and over - I would not do this with unfamiliar stocks)

Happy Holidays

RN

 

[No.Heat]

Quote from Redneck trader:

Howdy Sir

I just didn’t want to OP to mistake doubling his/ her initial position – then taking half…, as opposed to entering standard size then taking half
(It is a very solid method no doubt)


Great 1st point as well – and something all should absolutely consider if trying it (eta - I tend to stick to the same stocks over, and over, and over - I would not do this with unfamiliar stocks)

Happy Holidays

RN

Thank you for responding.

Happy Holidays to you too.

No Heat

 

[oraclewizard77]

I still use fixed profit targets. For example, I watch the market for the setup, once I see the setup, I am able to determine how far the trade will go and also where I want the stop to be in case I am wrong.

My last trade was perfect, took only .25 heat, and market only went .50 past my profit target.

As a trader, I am not trying to get the exact full move of the setup.

Now if I was wrong on the profit target, the only way to test that would be for me to have another contract to see if market continues in my direction.

The benefit is that when the market continues, you will make more profit, if the market goes back to break even, you still made money on the 1st contracts, the bad news is if you were wrong in the trade to begin with you will get stopped out on all of your contracts.

 

[TraderZones]

Quote from jack hershey:

Depending upon your stock selection criteria that is not difficult to do.

If you read the longer post above

ya da ya da blah blah...

No one rambles like Jack...

 

[pfranz]

I firmly believe in the fact I cannot predict the market, rather react to it in the best way I can.
So I don't believe in profit targets, I concentrate on good execution of trailing stops and market orders.
When I studied trading systems, I found volatility based profit targets strategies equal to trailing stop strategies.
So I would divide the trade in some parts and manage each part with different parameters (one locks in 20% of profits, another 50%, another exits when x seconds passed without increasing unrealized profit, and so on). This way you should be able to ride some winners with a part of your trade.

 

[Trader666]

Jack, let's see some of the numerous citations you've claimed ad nauseum to have received. Come on Jack, post a few.

Quote from jack hershey:

To the government, this type of trading resembles, mathematically, "insider trading".