This is a “ take the money and run “ market
- Thread starter Innervoice
- Start date
You keep going till you think that the prices will go in the other direction.
If you stay in till you make no money, you should wait till the price returns to the entry point and will go further in the wrong direction.
Example for what you say: buy at 100, goes to 200 and then back to 100. So in and out at 100? Because at 101 you still make money.
Great song by the way.
No, I wasn't referring to that.
I was referring to days when your making money versus days when you don't.
When you're in a good streak, you don't stop, you keep going and/or you increase your size.
When you're in a bad streak, you stop or slow down and/or minimize your size.
I agree with the OP in the sense that this is a whippy market that reverses on a dime on all time frames, so it's wise to not get too greedy on any given trade.
However, taking your money and running just because you made a profitable trade and there's a risk of giving it back does not sound like a very robust trading operation to me. Calling it a day for other reasons would be a different matter.
However, taking your money and running just because you made a profitable trade and there's a risk of giving it back does not sound like a very robust trading operation to me. Calling it a day for other reasons would be a different matter.
point well taken my friend. I just believe that if most traders simply walk away after a good trade and compare that to the days they continued to trade, they would clearly see a big advantage to walking away. Not everyone but i think most.
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You should have a logical basis to decide on what to do.
This example is based on fictitious figures.
If you have a 8 points profit it is not bad to get out if the market is not very trending. Only 5% of the profitable trades reach 8 points. 95% of the profitable trades never reached this level.
I would base my decision on the (hypothetical) table below. But only in non trending markets.
I tested this several times, and the conclusion came to the opposite of what you are saying.
Because you have to accumulate the wins to compensate for the losses.
And usually, wins come with wins, and losses with losses. So when you win, you have to maximize them to overcome the losses to come.
But hey, good for you if you follow your path and make (or think you make!) more money that way.
That's proof of a good system. When trading a good system it is impossible in the long run to beat it by trying to "improve" the entries and exits of your system.
If you beat your system, you have to improve your system. Because the purpose of a system is to do better than more random approaches.