The myth of letting your winners run

[volpri]

Yes, trading is very simple, just a couple of mouse clicks to be in any market and continually be on the right side of it.

Your post reminds me of the $10k hammer tap story.

Master’s of any domain make it look simple.





Yes, you are correct. I’m avid advocate of his methods. Unfortunately, he is no longer with us.

From the outside, yes some of his concepts are difficult to logically reason through. However, the spectrum of concepts are integrated. A sublime simplicity arises once someone does the work to understand via building their mind.

One can prove to themselves the validity of his perspective via the various drills he designed - all in the archives. He was trained as an engineer, his profession was trading and his ‘beingness’ was that of an teacher and educator.

The concept that initially attracted me to his work was his day-to-day demonstration of ‘paying it forward.’

I never was able to grasp and understand to apply his concepts but I will hand him this He gave freely. I never saw him charge a dime. And I never believed him to be a nut case like some do.

Did he pass away from sickness or just old age? I heard he had passed.

 

[Tradex]

Master’s of any domain make it look simple

In trading we only need to master our emotions and keep our losses under control, the trading system itself can be "ridiculously" simple yet highly profitable in the long run.

 

[Tradex]

his profession was trading and his ‘beingness’ was that of an teacher and educator.

Why didn't he write a book then, if he was that eager to share his knowledge?

 

[Sprout]

Why didn't he write a book then, if he was that eager to share his knowledge?

I don’t really know his motivations. I suspect it’s something like;
Because words don’t teach, only experiences do.

That’s why he created drills.

The drills work to create a perception of the market decoupled from beliefs. One’s belief structure has everything to do with the opportunities and challenges one can perceive.

Conventional wisdom is more conventional than it is wisdom.

 

[Sprout]

I never was able to grasp and understand to apply his concepts but I will hand him this He gave freely. I never saw him charge a dime. And I never believed him to be a nut case like some do.

Did he pass away from sickness or just old age? I heard he had passed.

My guess is that there are underlying concepts that have a variety of vocabulary that describe the phenomenon. Whether using Al Brooks nomenclature or Hershey’s both attempted to expand one’s level of discernment.

It’s my understanding that he passed from old age. I’ve not had the pleasure to interact with him personally. However his thoughts and perspective live on in his writings and I glean something new every time I revisit a concept during debriefing.

 

[tiddlywinks]

ET member Jack Hershey died November 3, 2014. He was 81. He did have medical issues. Fwiw, IRL, his first name was John.

I am a practitioner of Hershey methodologies every trading day. Thank you Jack! RIP.

 

[easymon1]

hammer

did somebody say 'Hammer'?
i love hammer patterns at support and resistance, 'case you ain't heard.

 

[BAT31]

What do you guys think of my garden. Getting to old to be weeding.

Laying down fabric and burning holes in it is ingenious.

 

[cynthiavasquez]

I think this statement is clearly a myth that doesn’t tell the complete story. If you focus on the criteria of taking exit on small losses, you’ll keep getting whipsawed out of every trading type on the intraday. Also, this statement doesn’t tell any about when to step up to take profits before they end up turning into losses. The longer you’ll keep holding on to a profitable position, it would be likely that the stock might reverse and lead that winning trade to a loser. Thus, it is better to stop counting on such a myth.

 

[oraclewizard77]

I think especially when trading futures, you need to determine you risk level before your profit target.

When you have a higher probability trade you can and should trade more contracts with a wider stop. This way you can scale out of the trade and then tighten the stop up.

However, while I don't have an issue if someone has a plan to enter in another contract before the stop is hit, we must take into account the intrinsic volatility and range expansion of current market conditions. As per watching a pod cast by a British trader, we don't want to do something where the juice is not worth the squeeze.

So therefore, you want to make sure that your stop loss will not generate a much higher loss than your win. Also, you don't want to have a stop that is more than double the win amount especially factoring in averaging down.

If you see your win while even in a high probability trade is only going to generate a very small profit vs where your stop loss must rest to protect a trade from price retesting the lows, then don't take the trade. Instead you could even just not watch the charts for 30 min or 1 hour and then come back to see if you see a better setup. You could also add price alerts to areas of importance while doing something else.

The other option on when you know you are right is to in fact try for more points than a standard trade especially when you your setup is close enough to a possible support level if going long vs coming into a trade that already waterfall up or down. If the main movement already took place then you could even wait a day or so if you are longer term trader to scan for better entries. My analysis is that after a trend ends, you will get consolidation which can be choppy before either a continuation or reversal of the main trend.