Taking profits and letting winners contradiction
- Thread starter mute9003
- Start date
10 Ways Traders Take Profits
https://elitetrader.com/et/threads/...t-right-here-baby.335635/page-13#post-5073703
I cannot stress this enough.... it just feels awesome to take a profit and have that money safely sitting in cash. VS. the stress of holding out for more POTENTIAL profit. How many trades have we all had that went from a nice profit (25% - 50%) to see us exit at break even or worse a loss. For me it is about how I feel and the mental aspect. I can only endure so much pain.
Not a contradiction. Ever hear of the term, "every rule has an exception"? What happens you have a profitable trade and the trend reverses? Do you, hang on and hope it bounces back up or take what the Stockmarket gives and take your profit? On the other hand, you have a trade which is strongly, trending and continues to go your way, piling up profits on that trade. Do you hang on or close the trade? Nobody is going to teach you common sense.
Last edited:
If you're investing, it's when the company's story changes.
If you're trading, it's when you find the profits slowing.
If you're trading, it's when you find the profits slowing.
A guy we used to trade with would take off half at a Target and let the rest run until his second exit Method was triggered. Stats showed that the runner half would consistently outperform the target exits nicely on a monthly basis. His response made good sense. The psychological benefit from locking in that Target was worth more than the percent of outperformance produced by managing the trade as 100% runners. Psychological capital. He traded futures, stocks and options. He'd do some of the short term options stuff that included just straight simple buy puts or calls from stock chart triggers and select the strike by buying the closest to 40 delta. Fast and simple.
I always take profits early and stops even earlier. I never regret taking $ quickly, then re-enter. Scaling and re-entries vs guesswork at exit targets.
My biggest winning days always have exits that "feel" early, but are often at or near tops/high of day or price action spikes.
Or selling overnight holds that gap up, if they start to fill, is an easy decision.
Aggressive exits, position sizing and re-entries is key. (fwiw I routinely do 80+ rts daily and did over 40M worth of order flow last year. To my detriment I didn't discuss all the scalps I did, here on et, focusing too much on inverse etf swings).
Anyways, "book profits early and often" is my motto.
My biggest winning days always have exits that "feel" early, but are often at or near tops/high of day or price action spikes.
Or selling overnight holds that gap up, if they start to fill, is an easy decision.
Aggressive exits, position sizing and re-entries is key. (fwiw I routinely do 80+ rts daily and did over 40M worth of order flow last year. To my detriment I didn't discuss all the scalps I did, here on et, focusing too much on inverse etf swings).
Anyways, "book profits early and often" is my motto.
For intraday scalping, take quick profits often especially when an impulsive move is in your favor. For investing or longer swing trade, ignore favorable impulsive moves and hold your position until the cows come home.