Target Price.. to change or not to?

T

taumeson

Quote from TMTrader:


I don't know if I have to tell you THE MOST BASIC concept in trading: Always define your target and stop-loss before you enter a trade - which is among the most fundamental ideas of trading.
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Okay here's a question for yah, In the circumstance like this morning, when the market opens ABOVE my sell price... what would you do?

Keep my sell price unchanged? or figure there is going to probably be a mild rally and hold off for a little bit to see what happens?

I just let it go at my original price.. but interested in knowing what others think
 
Quote from greenleaf:

I'd move my stop to your sell price and keep a close eye on it... Increase your stop as the price keeps going up....
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Yeah that is what I was thinking too... after the fact though, because honestly, again I'm such a total freakin newbie that this situation hasnt happened to me before so wasnt sure what to do at the time.

Nice little gain for me, but yeah, I wanna be a little more greedy next time :p
 
There is absolutely no way to know whether a gap up will continue strength or reverse on you. It is the ultimate moment of fear versus greed. As was said, if you want to take your chances, best to put a physical or mental stop below the opening price, and be prepared to pull it if price weakens. Generally, my personal attitude is that when I have hit my price targets because of a gap, I sell and move on. There are always other opportunities, and I don't like dealing with a stock that has hit my targets then loses steam because I got greedy.
 
If the price opens above your profit target, and you believe your system's odds make it advantageous to follow the system and exit, yet you see the position still gaining... then nothing prevents you from using a small trailing stop to ride it up somewhat more before saying goodbye.
 
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