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John
Really interesting thoughts. We have seen mucho dinero evaporate because of
a lack of a valid exit strategy. We're working on a trailing stop approach,
but I find that doesn't really work with our trading methodology.
I've noticed other thoughts and will have to look at them and how to apply
them in a volatile, trading market.
Regards
Guy
> -----Original Message-----
> From: owner-metastock@xxxxxxxxxxxxx
> [mailto:owner-metastock@xxxxxxxxxxxxx]On Behalf Of John Manasco
> Sent: Tuesday, September 01, 1998 5:29 AM
> To: Metastock List
> Subject: Exit strategies
>
>
> After reading several posts recently by some new and old participants in
> the list I would like to start a discussion of my favorite subject,
> namely loosing money. It seems there is a lot of confusion about when to
> get out of a stock or commodity. Most of that confusion is between my
> ears.
>
> First when you purchase a stock or commodity when do you pull out if the
> position moves against you? Second, how much do you let your position
> fall thinking that it's just a retracement a will continue the move?
> Could someone explain how to use stops properly? Especially trailing
> stops. Do I need em? I am getting mad watching my profits evaporate and
> go into losses.
>
> Last week I went flat in my portfolio. I sold all my stocks and kept all
> my option straddles. Then I fretted all week that I had missed the
> bottom and would miss the next up move. That's when I realized I have
> too much emotion involved in my decisions. I have always said I don't
> have a good exit strategy but I didn't realize just how much my emotions
> were playing into it. Now I question my entry strategy too, and that's
> pretty much mechanical. The subjective part is whether or not to
> actually put the trade on.
>
> Everyone tells me about fear and greed dominating trading decisions. I
> also think I have listened too long about my time frame and goals. I
> have been investing for ten years and trading for maybe five. Over that
> time people have told me to invest for the long run, let my profits
> ride, don't be swayed by short term blips, decide what time frame I want
> to trade and all the other admonitions about trading. This has served to
> confuse me more than help me as I made the transition from investor to
> trader.
>
> So I admit it, I sometimes lose money because of my exit strategies. A
> lot more than I would like to admit. So what are some of your thoughts
> on exiting a position. I really hope I get a lot of feedback on this
> because this is really important to me, and it seems to a lot of other
> people too.
>
> John Manasco
>
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