Targets verse Trailing stops

[ranj 10]

Hi all,

 

Looking for some advice in terms of profit taking for swing trades, ie 3-10 day hold ingperiod.

 

Do most people who swing trade look for target to take a profit at or just trail the position and if you trail what method do you use.

 

I have been frustrated as of late in my profit taking. I either leave too much on the table or the price falls just short of my target and I get a break even.

 

I was working a short in FBTX, financial's rallied from the 8th to the 13th.

FBTX set up with an inside, no demand bar at the top of the down going trend channel on the 13th. Short one of the weakest stocks in a weak sector.

 

http://www3.stockfetcher.com/sfchart/2124926297.png\

 

Set a profit target of at the open of 11/8 of 6.55 start of the WRB, nice R:R.

It closed today at 5.6, left almost another 2R on the table. :crap::doh:

 

I need help in figuring out what is the best way to exit or adjust my psychology to live the weakness of either method.

 

Thanks

Rajiv

[MC 10]

I'm very interested in this as I have the same issue.

Understanding I'll never get bottom to peak profit, I do think some volatility model for exits perhaps might do better than my current plan.

Currently I trail my stop to the swing high/low and it either leaves good profit OR gets tagged and stopped for break even. :doh:

 

Hoping someone has some good input for us.

[brownsfan019 17]

Ahhhh the age old how to exit thread.

 

There's some floating around TL so make sure to do a search.

 

Here's the best piece of advice I can provide - as soon as you realize AND accept that you will NEVER get out at the best optimal price, you can start to craft your exit strategy. Neither of you are there yet.

 

Here's what I mean - when you are saying 'only if...' it tells me that you want to catch the monster moves AND get out when there's only a little profit available. Well, that's next to impossible. You have to decide if you are either:

 

1) Going for the large moves and will make little/nothing on the small moves

2) Looking to take realistic profits every trade

 

I don't see how you can do either consistently. In a nutshell, it's a question of trying to hit homers or singles. I would suggest sticking with the singles in the beginning.

 

I realize that some may say it's possible to do both based on XYZ or ABC or maybe some of ABC mixed with XYZ and sprinkled with 123. And maybe it can be done. But in the beginning especially, I would suggest finding one method of exiting that suits you and then work it. I personally like taking regular profits, but I mainly daytrade. I've also found in my personal trading that many times going for the larger moves and taking small gains/losses on the other trades that I make LESS by going for MORE and risk MORE to do that. :doh: That will open up your eyes real quick.

[MC 10]

Ahhhh the age old how to exit thread.

 

There's some floating around TL so make sure to do a search.

 

Here's the best piece of advice I can provide - as soon as you realize AND accept that you will NEVER get out at the best optimal price, you can start to craft your exit strategy. Neither of you are there yet.

 

Here's what I mean - when you are saying 'only if...' it tells me that you want to catch the monster moves AND get out when there's only a little profit available. Well, that's next to impossible. You have to decide if you are either:

 

1) Going for the large moves and will make little/nothing on the small moves

2) Looking to take realistic profits every trade

 

I don't see how you can do either consistently. In a nutshell, it's a question of trying to hit homers or singles. I would suggest sticking with the singles in the beginning.

 

I realize that some may say it's possible to do both based on XYZ or ABC or maybe some of ABC mixed with XYZ and sprinkled with 123. And maybe it can be done. But in the beginning especially, I would suggest finding one method of exiting that suits you and then work it. I personally like taking regular profits, but I mainly daytrade. I've also found in my personal trading that many times going for the larger moves and taking small gains/losses on the other trades that I make LESS by going for MORE and risk MORE to do that. :doh: That will open up your eyes real quick.

 

I'm not looking for homeruns at all, that would mean I'm giving no room or risk of profit for a continued move.

 

I ride 2 lots...1st target is 10 YM points and then I move the stop to break even. Well every few moves they bump it up to that level of break even just before a solid move in the other direction. That annoys me, and maybe I should move it to break even -2 for example and net $30 instead of $40 if I get stopped out then. So I need to look further into that.

 

For the runners on the 2nd lot I use swing high or swing low which depending on the structure often leaves a very large chunk on the table. I trade off the 144 tick so I'm thinkin of maybe moving to the 3 minute chart once we are in a bigger move and try those swing high/lows since they are a bit less choppy than a tick chart.

 

Not lookin for the holy grail man, just some tweaks. :o

[walterw 10]

Should I add my two cents here...

 

I go all in, all out... have a technical entry criteria and technical exit criteria... I am more near to what Brown says... take small consistent profits,(my technical criteria is scalper exit) I dont go for the big moves that sometimes dont appear... quick scalps that put cash on my wallet over and over again... screen time is the best teacher.. also taking stops when you had a nice decent profit at some point... cheers Walter.

[ranj 10]

Thank for the input. I am going to start to aggressively journal on this topic. I take three major type of trade. I think each has a different potential and deserves a different exit method. Looking back at my prior trade in review. Even though I left money the table the location of my profit target was sound based on how I viewed the price action.

 

Thanks Again

[Sledge 13]

I too have been frustrated with my trailing stop being way to tight. The first one I ever tried I was shooting for a 65 pip profit and trailed it with a 15 pip trail overnight.

 

My 65 target was hit- but when I looked at my account- I had a measly 5 pip profit. Why? Trail was too tight, I didn't give it enough room to run, my target was reasonable and attainable, but fear made me plop that 15 pip trail on a 65 pip target. I left 50 pips on the table that night while I slept.

 

Best method for me is if you have as an example a 50 pip target- trail it by 30 or 35 pips. GIVE THE TRADE A CHANCE- but be wise in protecting your trade.

 

If I have read my charts correctly and a 50 pip target is reasonable, I may even put a 40 pip trail on it. Wouldn't you be happy with 40 pips instead of negative pips if your 50 target isn't hit?

 

Took me quite a while to figure this out- I left bunches of $ on the table as well and beat myself up about it until I found what worked for me.

 

Hope this helps!

Sledge