POLL: Do you clearly and specifically predefine your profit target?

Discussion in 'Risk Management' started by Thunderdog, Apr 19, 2009.

Do you clearly and specifically predefine your profit target?

  1. Yes

    17 vote(s)
    29.3%
  2. No

    41 vote(s)
    70.7%
  1. I'm curious to know what proportion of people here clearly and specifically predefine their profit target at or before the time of entry.
     
  2. Always!

    Before even considering putting a trade on, I use the first logical target level to calculate if my R/R is acceptable.

    If not, I'll pass on that trade and wait for a better one.
     
  3. Your assumption is based on a belief that you don’t know where the trend will end. Neither do I.

    However by using Elliott Wave and Fibonacci analysis I have much better idea than you of which price zones are important and have high probability to act as a magnet. On my 1rst target I take part off and lock in my profits on the rest of the position. Usually I don’t get out on my 2nd and 3rd logical targets, instead I tighten my stops and let the market take me out, no reason to let the market run away without me. Where does the "idiot" part fit in? :D
     
  4. I guess it depends on your trading. For myself, I 100% respectfully diasagree. I always know when I am getting out (for profit or loss) before I even enter a position. I adhere to my targets 95% of the time.
     
  5. Mr J

    Mr J

    I estimate the potential value of a trade, but I have no idea how that trade will play out. I won't exit simply because I've reached a profit target, I'll exit when my strategy no longer suits the market.
     
  6. Never. I often have a vague idea where I think a move could go, but I always watch the market action to make my decision. Many times I've said "that is going to 300" and then at 300 it is still trending and goes to 400, 500+.
     
  7. u21c3f6

    u21c3f6

    Always. I go for small consistent profits. I have my "closing" order posted shortly after the buy.

    Joe.
     
  8. I suppose that also depends on what instrument and timeframe one is trading. Eg. if daytrading the US markets then by watching the market dynamics will give you heads up to make a discretionary decision to get out instead of getting stopped out. On the other hand if trading say FX on swing basis, then the trade needs more wiggle room, and spike here or there is somewhat irrelevant (as long as certain price levels aren’t breached), and targets seem to be more appropriate, at least for me. Maybe it's because I'd prefer to have contingent orders in and go fishing instead of being tied tothe monitor. There are no right or wrong answers, only different personal approaches.
     
  9. Hester

    Hester

    Look for an exit point, but instead of exiting put a tight trailing stop behind that point. Locks in almost all of your profits while providing additional upside potential.
     
  10. I have my stop thought out ahead of time.. i enter it upon fill.

    then i continue to monitor the trade and how its reacting to my trendlines- which are usually already in place (the reason i entered)

    I constantly redraw new potentially "more accurate" channels as the day progresses and new tops/bottoms/middles are exposed

    then I will exit based on a couple possibilities:

    1) The trendline is broken.

    2) there is a huge run to the top of the channel, or out of it.

    Here I will decide if I really want to take the chance of revisiting the bottom and possibly have it break.. often it is not worth it if I'm already up a chunk. I will then exit at the first sign of weakness and take a breather.. give the stock some time to show me whats up next.. continuation/retest of lows or breakdown


    Today I was in SDS and was riding that beautiful channel for a good part of the day- but a few fast red candles fired off and it spooked me and I exited.. Sure enough, it hit a trendline I had drawn and went right back into play. Shouldve adhered to the trendline.
     
    #10     Apr 20, 2009