After the 1st leg up do you sell or hold?

Discussion in 'Trading' started by rin4et, Oct 23, 2017.

  1. rin4et

    rin4et

    I am having a dilemma on what to do after the 1st leg up. Do I sell or do I hold?
    I used to sell and the stock would go up a 2nd leg and I would kick myself for not staying in the trade. After all don't they say "let your winners run".
    So today I decided to do the reverse and hold after the 1st leg up. Instead it turned out there was no 2nd leg and the stock ended up drifting lower and I gave back part of my profits.
    Please don't suggest scaling out, my position size is already quite small.
    I am thinking the best solution would be to sell after the 1st leg up and then wait for confirmation of a 2nd move higher before jumping in.
    Would love to hear from other day traders on how they handle this dilemma.
     
    WonderBoy likes this.
  2. Robert Morse

    Robert Morse Sponsor

    I like to evaluate each trade at the time you are looking to exit. If you had no position, would you put one on at that point? If the response is no, I would exit. If the answer is yes, I would consider adding. If you don't want to add because of risk or lack of excess margin, just hold or place a trailing stop.
     
    Last edited: Oct 23, 2017
    iamnewuser911, Xela, ET180 and 3 others like this.
  3. Ah, such is the dilemma of all traders. I put this one under the umbrella of being a good loser. Specifically, knowing when to let your position go without regrets or remorse. There are times when I close a position and delete the symbol from my list just so I don't second guess myself.

    I have my little mantra that helps with this. Every winner is a win, and every loser is a tax write off.

    I also think this is why I'll notably more profitable trading put spreads...because there's a limit to my gains, the obvious exits aren't clouded by my greed and stupidity. I'm fairly confident my IQ varies inversely with the unrealized gain in my account.

    If you find an answer to this one, be sure to let us know!
     
    Xela and tommcginnis like this.
  4. rin4et

    rin4et

    The answer is what @Robert Morse said above.
     
  5. Fair enough. But I think you underestimate my immense powers of greed and stupidity.
     
  6. Robert Morse

    Robert Morse Sponsor

    I find it easy to keep this discipline as I know it is a numbers game. I have little regrets from missed "home runs." I just move on from the good and bad ones and try not to repeat mistakes more than 100 times!
     
    Bugsy and Grantx like this.
  7. spindr0

    spindr0

    There is no accurate answer available today since the future is unknown.

    As Robert Morse suggested, reevaluate the position after the leg up. If you'd buy it at that price, hold. Otherwise sell. Scaling out is a good way to lock in some gain. Set a trailing stop and that will lock in profits, assuming no gap. If available, utilize options to replace the stock. And as beerntrading suggested, if it's not something that you trade frequently, after you close the position, delete the symbol. Ruminating over what ifs is a waste of mental energy.
     
  8. What the heck is a leg up -- speak english.

    But if I think I know what you're asking...only you can predict and judge the market future for yourself.
    Asking others' opinions about the future is completely meaningless and should be irrelevant to you.
     
    yjcho03, murray t turtle and Grantx like this.
  9. tommcginnis

    tommcginnis

    If you're considering an exit, but don't want to jump "too soon", consider writing a call on it.
    It's no guarantee that the underlying won't tank, but it improves the taste of *that* bitter medicine nicely. And if it should skyrocket another leg up? Wellllll, you were going to chuck it anyway, right? So there's some nice call premium to soften *that* blow, too.

    Still, I think {we *all* think??} that Robert Morse called it: treat it as a de novo trade: get into it (keep it) if you wish; exit (sell) if you don't.
     
    ironchef likes this.
  10. rin4et

    rin4et

    You don't understand English if you don't know what a leg of a move means. Stop trolling and keep your mouth shut if you don't have anything helpful to say. And do me a favor get lost and don't ever post on any of my threads ever again! Find something constructive to do with your time.
     
    Last edited: Oct 23, 2017
    #10     Oct 23, 2017
    tomorton likes this.