Is this a good risk management strategy?

Discussion in 'Risk Management' started by Sure Chap, Dec 18, 2015.

  1. QFT

    It certainly seemed like that was true when I first started swing trading equities years ago. It seemed like I was always getting stopped out too soon. That is why I first started trading options. I would buy an equity and then buy a put where I wanted my stop to be. Prevented me from getting prematurely stopped out and also also served as gap insurance.
     
    #11     Dec 18, 2015
  2. Bry

    Bry

    Never taking profits? Why would you do that? The only good reason would be that you are creating buy and hold positions, and for that you need no stop losses.

    Loading up on blue chip high-dividend payers would make sense for this.
     
    #12     Dec 18, 2015
  3. Sorry about the confusion, I meant I'd only exit and take a profit if my stock was to rise and fall back down to my "trailing" stop loss. I want to let my winners run so to speak.

    For example I enter a trade and place a 5% trailing stop, stock could either immediately go down and I exit with 5% loss or stock rises 15% then loses 5% on a downswing I profit 10% and exit the trade.
     
    #13     Dec 18, 2015
  4. prc117f

    prc117f

    Thats noob thinking,

    If your plan is never to take your profit, but only exit on losses This means your account will go to zero eventually.
     
    #14     Dec 18, 2015
  5. I am a noob, ...how does one know when to take his winnings or let it ride? Damn trading is hard...
     
    #15     Dec 18, 2015
  6. The short answer is try it. o_O
    There's so many ways and viewpoints and methodologies on trading...that one can't necessarily give a direct yes or no answer to any question.

    Every trader has to eventually venture out on their own adventure -- learn and explore on your own, and develop your own conclusions.
     
    #16     Dec 19, 2015
  7. I think you're right, there's lots of learning; trial and error in trading and I'm just realizing that now. To be honest, after all the input I don't think I can just use a one size fits all strategy. It needs to be based on the edge I have and I have to adjust my entry/exists and risk/reward based on the opportunities as they come. I appreciate all the input and keeping me honest...my laziness is getting the best of me.
     
    #17     Dec 19, 2015
  8. Mysteron

    Mysteron

    Seems to me that you haven't expressed yourself well and some others have misinterpreted your meaning. You've said that you place a trailing stop, so therefore you do take profit if price moves in your favor and the trailing stop moves beyond your entry price. Are you attempting to automate yor trading using such a strategy?
     
    #18     Dec 19, 2015
    Xela likes this.
  9. Xela

    Xela


    This.

    Exactly this. People have been replying to the poor OP with all kinds of mistaken assumptions behind their suggestions and observations. Granted, he could have been a little clearer, but most of what he might try to learn from this thread emanates from people talking at cross-purposes to his original post.

    (Sorry not to be more helpful, myself, but I don't trade individual stocks at all.)
     
    #19     Dec 19, 2015
  10.  
    #20     Dec 19, 2015