Taking Profits & Letting it ride...

[illiquid]

Generally, the harder it was mentally to stay in the trade, the longer I try to hold for further gains. If the move happens with little or no pullback, I'll usually lock in gains with a hard stop. This is for longer term trades as opposed to intraday, and I find what usually works for one time frame is the opposite of the other, so fwiw.

 

[StockCoach]

Quote from ForrestGump:

Yes, quite true.

Since most of us judge the market by the way it 'looks', maybe there is something about its looks that wrong-foots us so much.

That is where a well-developed system comes in handy. It takes pressure off of you to have to 'look' at the market after each and every bar to decide whether to take your profits or let them run.

Happy Trading

Well said Forrest A trading system is what every trader should have (either in his/her head or in code!). Because each trade result can be seen as a random event, you will trick yourself into thinking one way works over the other, when in reality something completely different should be used.

You need to find what works, on average. Be a trader for the long run, not just this trade! Good luck.

 

[murray t turtle]

Quote from AusTrader:

. Some days a large range days, some aren't. You can't have it both ways and I don't think it matters in the longer term.

However, if you run a simple test on any volatile stock or index. Simply buy the open and place a tight stop, say 20% - 30% of the average range over the last 200 days. Next simply exit on close.

From there add in varying increments of profit targets or better still optimise the lot. Now take a look at the parameter sets and you should see that ANY profit target over the longer term detracts from overall profitability. Its a bummer that these days happen, but that should be viewed as a small annoyance rather than missed opportunity. My experience is that a profit target decays profitability.

Two things to consider:

(1) Most successful traders are trend followers. Eckhardt etc never use profit targets because it will skew your win/loss against you.

(2) you'll never make a big profit by taking a small profit. I can guarantee that.

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Good points Aussie trader and 2 more.

3] Dont like profit targets much, especially cash markets in bull markets; but lower highs and lower lows have been a wise sell signal over time Targets may cut profits & cut drawdowns.

4]However when you have an exchange deadline,,
like Slims 3rd friday on TOL;
you are either going to be early or be late ,prefer just a tad early Riply.
Closing Prices are trending UP on SPY,TOL;
weaker on DIA, all 3 measured on 6, 12 month charts.