Riding winning positions (intraday)
- Thread starter listedguru
- Start date
I've been trading for a little over a year and I have the same problem--taking profits too soon. I'm mainly a scalper and I only risk a few cents for each trade by setting tight stops. I also stare at the time and sales a lot and big bids/offers will often shake me out. Sometimes I feel like I need to trade of charts but I'll need wider stop losses and I'm just not comfortable at this point. There are lot of ways to let winners ride. The main problem is conquering oneself.
I used to exit early a lot as well. It was probably the biggest and most costly mistake I made early in my career. I would do all the analysis, my research would say this is a $30 stock- I would buy it at $20, freak out when it hit $22 and sell it for smallish profit only to watch it run to the $30 target my research suggested.
I have improved a lot but it takes time and every year I get better at it. Try to make small improvements at first and build on them over time.
The main thing that helped me was setting price targets and having a consistent plan. I have always been a terrible discretionary trader- it just isn't my strength- so it was imperative for me to build a trading system that clearly defined my entry and exit points.
Luck to all.
I have improved a lot but it takes time and every year I get better at it. Try to make small improvements at first and build on them over time.
The main thing that helped me was setting price targets and having a consistent plan. I have always been a terrible discretionary trader- it just isn't my strength- so it was imperative for me to build a trading system that clearly defined my entry and exit points.
Luck to all.
With all due respect to the fine comments made here, If you knew which 'winners' to hang on to until the final high print, you'd be a billionaire in short order.
It's supposed to be HARD to know. Once you come to terms with that you can decide how much unrealized profit you are willing to forgo , in order to see if the stock goes higher.
There are no easy answers, since if there were, you could use the same method to initiate new positions in the same stock.
It's supposed to be HARD to know. Once you come to terms with that you can decide how much unrealized profit you are willing to forgo , in order to see if the stock goes higher.
There are no easy answers, since if there were, you could use the same method to initiate new positions in the same stock.
listedguru,
I am pretty much in the same situation as you. Often I make .20 to leave 1 or 2 points on the table. But a few days ago, I looked at it a little more closely. The fact of the matter is, at the time of exit you have no way of knowing how far up the stock will go. It's true I lose out on a point or two every other day, but at the same time there are a lot more situations where the stock moves in a .70 range all day and I pull a point or two out of it.
If you truly believed that you were not holding onto your positions long enough OV AVERAGE, I think you wouldn't be making that "mistake".
What you perceive as your "problem" might be with your strategy rather than your psychology.
I am pretty much in the same situation as you. Often I make .20 to leave 1 or 2 points on the table. But a few days ago, I looked at it a little more closely. The fact of the matter is, at the time of exit you have no way of knowing how far up the stock will go. It's true I lose out on a point or two every other day, but at the same time there are a lot more situations where the stock moves in a .70 range all day and I pull a point or two out of it.
If you truly believed that you were not holding onto your positions long enough OV AVERAGE, I think you wouldn't be making that "mistake".
What you perceive as your "problem" might be with your strategy rather than your psychology.
Was that a joke? I think 5k shares is a pretty big position.
--MIKE