when to take profit?
- Thread starter dafishman
- Start date
I trade the same patterns every day. I guess if the price action they produce changes some day, then I'll have to run new studies. The "professionals" have to accumulate and distribute far larger positions than me. There are only so many ways to do this. As a result price action patterns under certain conditions tend to repeat.
In a well-defined trend, I keep trading until until the end (a reversal pattern sets up). I rarely scale in or out because I'm a scalper. I'll keep taking trades in the direction of the trend, but if I scaled in/out then I'd be adding in a strong trend. As a day trader, there are definitely "reasonable" targets. For instance, if I shorted the top of a range, it makes sense to take profit at the bottom of the range unless the price action begins to tell a different story. If I went long from a pullback in an uptrend, I expect a measured move (upper channel touch or possible overshoot). And so on.
Not enough information. Timeframe dictates length of trade normally, are you trading daily, weekly, or monthly charts? Are you looking to stay in a few days or is your personality handle several months?
Keeping stats work best for me, checking last 500 trades shows me what the "mean" in profits were on profitable trades, and how far those went against the trade (so I know how much I should risk). Now when you reach just short of the mean, you could unload half your position, then trail a tighter stop on the remainder, but I prefer to watch near the close, and if it looks like it will close below yesterdays lows, good place to exit.
That will work like a charm if one can catch major trend reversals with only a few failed attempts. Otherwise, in general, the very low 'p' and extreme 'R' make it deeply losing; piles of losses that no win could compensate for. Consider the opposite approach, never taking any losses and take profits against favorable impulses; this, scaling in and out, controlling size. The high 'p' has many benefits. However, sooner or later one will inevitably end up on the wrong side of an extreme move and go bust. I'm sure that happens on every spike on every chart!
In the end no betting strategy in itself can guarantee success and positive expectancy can only come from prevalently correct directional calls.
ras72
Speaking strictly for myself, I get in when my indicator (don't ask) crosses my upper threshold, and I get out when it crosses below my lower threshold. Â Simple.
" Originally Posted by lotek771 View Post
I never take a profit. I only take losses. Eventually, my account gets to where I have enough money, or more than I need, and I get flat.
I've had many many profits turn into losses and get stopped out. But you gotta pay the man somewhere, and that's where I choose to pay him."
" Originally Posted by zdreg View Post
he is dumping his losers and letting his profits run till he reaches a certain point when he needs the money."
should the words no longer needs been inc. in response?
I'll throw my 2 cents into this pot.
I think the answer to the question starts with "what are your objectives"?
I've seen no reference to time frames here, or to trading style or time availability. So i'll proceed in a general manner.
If I'm trading for short term momentum moves that can go on from hours to days, I'll start by looking at a large hourly chart and asking myself "where is it going?". If it's going nowhere, then I might decide to stand aside or range trade it.
For simplicity let's look at EurGbp as it has recently offered a good example for our means. Taking our cue from the 4H chart, this week opened and found sellers around the rejection area from friday. Let's hypothesize you found an entry around there. Stop would be initially above the reaction highs.
then you could shift down a time frame and manage the trade via hourly lower highs/lower lows in a typical peak/trough manner...that way it's the market to tell you when to pull the plug on the trade.
An evident level to watch was last week's lows and that's where we got a reaction that would have taken the trailing stop.
This was only an example, but the main lesson i've been taught over the years is to be systematic in everything, including the way I manage the trades. If you do not manage the trade with the same structure each time, your trade records won't be able to tell you really what you're doing right or wrong because you won't be operating with a "structure".
Hope this makes sense...
I think the answer to the question starts with "what are your objectives"?
I've seen no reference to time frames here, or to trading style or time availability. So i'll proceed in a general manner.
If I'm trading for short term momentum moves that can go on from hours to days, I'll start by looking at a large hourly chart and asking myself "where is it going?". If it's going nowhere, then I might decide to stand aside or range trade it.
For simplicity let's look at EurGbp as it has recently offered a good example for our means. Taking our cue from the 4H chart, this week opened and found sellers around the rejection area from friday. Let's hypothesize you found an entry around there. Stop would be initially above the reaction highs.
then you could shift down a time frame and manage the trade via hourly lower highs/lower lows in a typical peak/trough manner...that way it's the market to tell you when to pull the plug on the trade.
An evident level to watch was last week's lows and that's where we got a reaction that would have taken the trailing stop.
This was only an example, but the main lesson i've been taught over the years is to be systematic in everything, including the way I manage the trades. If you do not manage the trade with the same structure each time, your trade records won't be able to tell you really what you're doing right or wrong because you won't be operating with a "structure".
Hope this makes sense...
I simply do not understand the concept of "my account gets to where I have enough money, or more than I need, and get flat."
And even if I did that statement is CERTAINLY not expressing the concept of needing the money ... in fact quite the opposite.
If s guy wants to express that he dumps losers quickly yet lets profits run there are a number of valid ways in the English language to express that but he not only does not say that he doesn't even come close. Rather than nitpick past this point I will stipulate that is probably what he wanted to say but in no way will I agree that he came at all close to actually saying it. He did not!!!
And even if I did that statement is CERTAINLY not expressing the concept of needing the money ... in fact quite the opposite.
If s guy wants to express that he dumps losers quickly yet lets profits run there are a number of valid ways in the English language to express that but he not only does not say that he doesn't even come close. Rather than nitpick past this point I will stipulate that is probably what he wanted to say but in no way will I agree that he came at all close to actually saying it. He did not!!!
Hmmm...
Isn't that like saying "I've reached my profit goals or I've exceeded my profit goals...its now time for me to close the position".