I'm notoriously impatient and book small profits early. Any tips for letting winners run, especially for swing trading? Example I bought PENN MGM off march lows but sold way tf too early. I'm asking because if for example markets sell off and I swing trade inverses SQQQ UVXY SDOW SPXS SOXS LABD I don't want to get shaken out too soon.
It's not easy to "hold for a large gain", and there is no "pat" answer. The market will give you every opportunity to turn a potentially large gain into a small one.. 1. I don't believe in using "targets"... unless they happen to coincide with clear support/resistance. 2. The other has to do with "counters" (moves against the trend or against your position), which you can never know. You just have to decide what to do about them... either trade out and (perhaps back in) or ride it out and hope it's shallow. Regardless, it's always a guess. If you want to use a mechanical tool, I suggest a "regression channel". Most trading software will have one or more of them as canned tools. The way it works... you want to be long in an up-sloping channel and not long (or be short) in a down sloping channel. When the channel breaks, you need to be changing your position too. Another way is to use RSI or Stochastic indicator...(I know, "indicators don't work"). You try to buy when the indicator is low in the range then ride out counters until the indicator gets high in its range as an indication the swing move may be completed. Note: When it comes to "range indicators" like RSI and %K, suggest spending some time to learn "how they work". "Buy oversold and sell overbought" is only part of it.... and even that sometimes seems not to work.
Fear and greed rule the market. Don't be greedy and don't be afraid. You have a trading plan; follow the plan.
Go to >trademastery.com< and join Ken Calhoun's Trade the Open chat room for only $7, watch the video courses he has produced and attend his "Trading Week Ahead" webnars. The guy has award winning articles each month in TASC and is a Moneyshow speaker. Someone with his depth of experience and knowledge will surely be able to help you out.
Nope wait 2mins too long and you've got a loser which was good profit, 5 mins too early and you've took 1/3rd the profit, can't win, or ever will, just be happy to bank a profit and repeat.
You get burned by selling late too many times it makes you paranoid. It's like the other day I bought YTEN at 6.50 & exited immediately at 6.70. I thought I was smart by locking profit early with sketched movement I noticed on the level 2. It runs to 10 in under 5 min.
%% Thats the big trend question/LOL Bull market above 200dma/let the profits run, mostly; but even there I like to get some partial profits weekly. INVERSE /bear moves ETFs= can't really let the profits run like longs; nor does it pay as much for deep drawdowns. OF COURSE they can have a super good daily trend == super trend========shallow PULLBACK...…………………………………………………………………………………………………….. MOVING AVERAGES HELP ME, but on an inverse etf; have to front run myself also. SQQQ has made more money than SDOW/past 4 weeks , so could give sqqq a bit more run room.[ Have noticed by 1;00 cst, most of the daytrade profits are made for me.True of sqqq,sdow,spxs last Friday.]Actually any leveraged etf better to sell a bit early than late unless you have huge profits/let some run.
%% True; even more so of single stocks under $10. WHEN huge number of buyers want it /shallow pullback + over $5 or 10 bucks, pays to let profits run. All stocks +etfs are risky; single stocks even more so...…………………………………………………………………………………………………………………..And something that runs up33% +/ in 5 minutes may want to take some profits or partial profits @10/LOL Or tighten stop on partial profit. Inverse etfs are much different from long etfs, so it depends...…...
While we can’t predict the future, we notice that a instrument will have brief trends, sustained trends, maintain a trading range, or reverse. Two concepts to consider are variable exposure based on statistical validation, or at least based on sound reasoning, and hedging market risk when trading equities, a component of overall risk. Variable exposure means taking partial profits at support or resistance areas, reducing exposure should the instrument move against the session open either by a threshold period of time and or amount, and increasing exposure after “Healthy” corrections or favorable price action after the open. As a side note, Consider the long term relative performance of the instrument sans scheduled events when looking at the history of sustained advances. By the way, with stocks, sustained moves are based on long term fundamentals, not necessarily a earnings report. Think like a major institution who can’t simply enter a full position at a click of a mouse or situations that require “Forced” institutional trading such as index component changes, “Window dressing”, or events related to IPOs, among other things. Partially or fully hedging market risk considers that you have confidence the stock you are trading will outperform the market. This may make it easier to hold on to a winner if the gains are more steady. It may be justifiable to increase position size with this sort of hedging.