For options. I trade monthly options. I do swing trades and exit as soon as I reach my profit targets. I find that it is much easier to turn winners into a losers when doing short-term trading.
Thanks. I intuitively believe the mindset of what you described and not being greedy. However, it is just strange that everyone is preaching letting winner run and made me doubt myself.
I don't think 'scalping' and 'letting the winners run' can go together. Unless the term 'scalping' means something different for you than what it was originally defined for. To answer your specific question, it all depends on your trading method/strategy/model. If you tested it well, you shouldn't have to ask that question.
I am not sure what I have to say will be helpful or not. I have gone entirely to short term (daily) trading. Here are my thoughts on exits. No one knows how far a move will go. Hence I dislike targets. You will take losses. Therefore its critical that you get all that you can out of a winner. Market moves tell you when they are done on a daily, weekly, monthly and yearly basis by price action. A good exit leaves open the possibility of a reentry if the market was just deeply retracing. I am not sure how much you use TA in your trading but I just thought I would throw out the idea that TA can be used to help decide when to exit. Just to save you a little time aI will acknowledge that there are some special considerations with TA and options.
%% TJ999; Like +Ela noted one size does not fit all. BUT with TSLA all over the 6 moth chart/50dma[not really a good uptrend or downtrend , lousy earnings.....I like profits running but what profits on TSLA?? So it depends........ Good question hope this helps, helped me.
In my opinion that would require you be able to say this. If this (fundamental thing) occurs I will exit. I dont know what fundamental thing could occur that would be an exit trigger. Short of the company declaring bankruptcy if you are an equities trader.
It's not about managing winners *or* losers at all. It's about, "Where is the best place for my capital right now?" That's it. [mic drop.]
Hey traderjoe999, just some very short input from my experience and view on trading: R:R is overrated, especially in shortterm trading. I would not want anymore to be stuck in that boxed thinking of "ohh, I have to wait before taking some profits, my target has not been hit yet" or "hmm, price is still 5 ticks away from my SL, I dont have to eat that loss yet". Thinking like that in shortterm trading is too static for that dynamic world we are trying to make money in. Buy high, sell higher. Or Sell high, buy lower... stuff like that. It sounds dumb and too simple, but thats the only real secret one needs to know. To have success with these simple concepts in the dynamic world of everchanging markets, the most critical ingredients are experience and patience. Experience of having seen the same or similar situations over and over and over again. And the patience to 1.) wait for the right timing on your entry and exit, and 2.) to let the statistics and especially the law of large numbers do their work (=you must be patient enough to not expect to win every trade and every day, but after for example 100-200 trades your results should start to stabilize and your account should start to confirm that you know what you are doing). I dont remember his exact words, but years ago Lescor already explained it in his excellent thread: dont overcomplicate this stuff, it is not rocket science. Keep it simple, and practise every day. Almost certainly you will see improvement over time. Greetings, CALLumbus
This is somewhat incorrect in my opinion. You basically want to make a lot of money when you are right and lose little when wrong. It might be that you just have bigger positions on when right and small positions when wrong rather than hoping a position goes further in your direction.