|
PureBytes Links
Trading Reference Links
|
I by far am not the authority on exits, whether trailing or target, however one
thing that I have noticed is that the type of stop you use should be determined
by the type of trading that you are doing. For me, if im trading a short term
swing type of trading I prefer to use targets, if its more trend following in
nature, then I prefer to use a trailing. I have found by using a target exit
on my swing trades that Im able to keep from giving back much of my trade. (
notice on a single days range how much you give back if you let the market stop
you out) in most cases its pretty substantial at least in my eyes anyway. On
swing trades all that I am concerned with is that one impulse move and thats
it, Yes there will be times when the market continues to go on and thats okay.
I made money. On longer term trades, obviously I am thinking the market is
going much higher, so therefore I want to give the market more room to work, so
I use a trailing stop or exit. If I think the trend will end then I will use a
target exit once more.
Again let us remeber that we are all different and what may work for one trader
will not work for another. Use the type of exit that you are comfortable with
and be consistant.
Profitable Trading
Troy
wallst@xxxxxxxx
GEORGE MOLDENHAUER wrote:
> Rememebr the old saying....you should let your profits run and cut your
> losses short. Setting a profit target in my opinion, is in violation of
> these rules. I entered a "hypothetical" trading contest on AOL a few
> months back and was chastised by one of the other contestants because my
> short
> term swing trades in the S&P had no stop. If my work said long...I stayed
> long. If it said short then it reversed to short. This same contestant
> was trading the S&P market as well and, while he had a stop, he alos had
> profit targets. While his losses were smaller, my profits were much larger.
>
> My goal is to beark even on most of my trades. Make a bit here, lose a
> bit there but be on the train for the really big move. I don't think I am
> alone when I say that the majority of my profits come from a minortiy of my
> trades.
>
> This is not a recommendation to trade "stopless". That is just they way I
> work. But I do feel that you need to address the letting your profits run
> angle as well. What got you into the market to start with? Is that
> situation still present?
>
> There is a lot of talk around here about being short Oct sugar. So your
> "work" says sell. I, for one, would evaluate the market daily to see if
> my work continued to say sell. If it did, then I would be short...if not I
> am out.
>
> I once new a fellow that never carried home a position with a loss. That
> was his exit rule. He traded 50% retracements in a trending market and
> NEVER took a loss home. That was his strongets trading rule and he made
> money.
>
> My advice is to know and follow the three "R"s...Risk, Reward and Reality.
> If you
> know the 3 R's on each trade...How much do you have to risk in this
> trade...How much (from an historical perspective) do you stand to gain
> (reward) and what are the chances of either happening (Reality). If you
> can live with all three...TAKE THE TRADE! If not, wait for the next
> opportunity.
>
> Good Trading All
>
> George Moldenhauer
>
> ----------
> > > > From: A.J. Carisse <carisse@xxxxxxxxxxx>
> > > > To: RealTraders Discussion Group <realtraders@xxxxxxxxxxxxxx>
> > > > Subject: Re: Exits
> > > > Date: Saturday, June 20, 1998 9:38 PM
> > > >
> > > > steven poser wrote:
> > > >
> > > > > Of course trailing stops can work too for those with an itchy
> trigger
> > > > > finger, but if what got you into the original trade is still valid,
> > you
> > > > > might want to look for a re-entry point (that has a decent risk
> > > reward),
> > > > > below your just exited level (assuming the original trade was a
> long)
> > > so
> > > > > you have a chance to let the profits run after all.
> > > >
> > > > This is a very good point. Exiting a trade does not mean at all that
> > one
> > > is
> > > > foregoing future positive movement. The trick is to look to exit
> when
> > > > conditions are temporarily unfavorable, and to look to re-enter if
> and
> > > when
> > > > they become favorable again. This does not mean, however, that one
> > ought
> > > to
> > > > only re-enter below one's exit (assuming we're long) - in fact, most
> > > often a
> > > > good re-entry will be above the exit - for instance, taking out the
> > > > resistance it had previously failed at. One must look at the cost of
> > > this
> > > > style - commission plus slippage (the difference between the exit and
> > > > re-entry) as insurance - protecting one's P/L level from slipping
> > > further.
> > > > This is a very good strategy overall when applied properly.
> > > >
> > > > Regards,
> > > > A.J.
> > >
> >
|