“I Sell My Winners Too Early and Hold Losers.”

Discussion in 'Psychology' started by dealmaker, Nov 11, 2019.

  1. birdman

    birdman

    Agreed ... and I sometimes wonder if an optimist is at a disadvantage when it comes to honoring stops.
     
    #11     Nov 11, 2019
  2. Buy1Sell2

    Buy1Sell2

    You're in desperate need of Prudent Risk Management skills.
     
    #12     Nov 11, 2019
  3. themickey

    themickey

    A stop is only as good as the confidence you have in it.
    Many stop systems are like entries, they have no real logic to them so they become random.
    If you have random entries and random stops you really don't have a logical trading method.
     
    #13     Nov 11, 2019
  4. guru

    guru

    Many of my strategies do not use stops and hold losers while selling winners early.
    This approach is valid, backed by research papers and discussed by quants as valid trading method showing up in backtests.
     
    Last edited: Nov 11, 2019
    #14     Nov 11, 2019
  5. Overnight

    Overnight

    Until you get a margin call and wipe your account.
     
    #15     Nov 11, 2019
  6. guru

    guru


    Depends on strategy. You can exit after some time holding a losing position. While your risk management can be done via position sizing, affording to lose 1000% on a short position or 100% on long positions and still come up on top. And you may need to be a contrarian to have a chance against those who follow the rules.
     
    #16     Nov 11, 2019
  7. I'm always surprised to see articles like this. I assume these are really smart guys running funds with money that is very precious to them and they would have already done extensive testing of different ways to exit their trades. This would have led them to develop specific rules like "when price does this, then we'll exit this way" and "if price does that, then we'll use this other exit system that has been shown to maximize our profit while minimizing losses in our tests".

    The fact that they're having such problems suggests that most are using discretionary exit methods, meaning that they haven't done proper testing and haven't developed rules. Probably I just don't understand the fundamentals-based rather than technical analysis-based mindset of most fund managers, but I couldn't trade that way.
     
    #17     Nov 11, 2019
    tomorton likes this.
  8. IAlwaysWin

    IAlwaysWin

    If you pick the correct direction according to the highest timeframe, all you'd have to do if close your trades at the end of the trading week. Buy and hold until the end of the week, it's easy yet so many complicate the easiest part.
     
    #18     Nov 11, 2019