Swing for the fences or go for Singles

S

Smart Money

Calling all successful traders:

Do you find that you make more money when you try to swing for the fences, even though you'll have some losers that "hurt"?

Or do you find that losses are so intolerable that you'd rather just cap your gains to avoid the losses completely?

Which is more important...making the periodic "big kill", or avoiding getting burned?

Just curious...

SM
 
Quote from Smart Money:

...Which is more important...making the periodic "big kill", or avoiding getting burned?
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How do you define "getting burned?"
 
The three goals of trading, in order of importance:

1. preserve your capital
2. earn consistent returns
3. earn large returns

Skipping 1 and 2 and going straight to 3 is what kills most amateurs.
 
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Quote from Gabfly1:

How do you define "getting burned?"
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Failure to leave a position early and having it backslide. Or failure to wait for an established move because you want the early gains. I would say "being wrong about the trade"...but that is unavoidable some of the time.
 
Quote from Smart Money:

Failure to leave a position early and having it backslide. Or failure to wait for an established move because you want the early gains. I would say "being wrong about the trade"...but that is unavoidable some of the time.
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1. Must a trader who seeks larger returns necessarily allow a profitable trade to go into negative territory?

2. Must a trader who seeks larger returns necessarily hold a static position for the duration?
 
Quote from Smart Money:

Calling all successful traders:

Do you find that you make more money when you try to swing for the fences, even though you'll have some losers that "hurt"?

Or do you find that losses are so intolerable that you'd rather just cap your gains to avoid the losses completely?

Which is more important...making the periodic "big kill", or avoiding getting burned?

Just curious...

SM
More...

Can't go broke taking profits. I typically set my exit price (long or short) when I enter the trade. So I "limit" my profits. At times if the market is moving a lot either way I may change the exit prices.

Going for home runs is a low probability way to trade.
 
Avoiding that dumb trade that leads to a big loser. You can go for a big winner but have to use even more control to just take a loss if wrong.
 
Quote from Smart Money:

Calling all successful traders:

Do you find that you make more money when you try to swing for the fences, even though you'll have some losers that "hurt"?

Or do you find that losses are so intolerable that you'd rather just cap your gains to avoid the losses completely?

Which is more important...making the periodic "big kill", or avoiding getting burned?

Just curious...

SM
More...

It depends on how big your account is and how much income you need. For steady income, if you have a decent-size account it's probably better to go for singles and doubles. If you already have your expenses covered (a pension, part-time job, etc.), but not a large account, I'd say it's better to swing for the fences (within reason, for instance cutting losses short, but giving more room for some of the trades with potential to develop into large wins, even if you give back profits on a regular basis).
 
Single, double, triple, home-run, strike, none of those terms are trade attributes. Your system/setup/methodology/technique/signal/trigger/market conditions/whatever, is what determines your entry and exit.

What's considered a single or swing-for-the-fence when price movement of the market you trade has/is contracted? What when the price movement has/is expanded? How about when trending?

1) Preserve capital
2) Do not let "reasonable" profit turn into loss (you must define "reasonable" based on your own reasons for putting on the trade in the first place)
3) Profit or loss ... NEXT!
 
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