Taking Profits

Discussion in 'Risk Management' started by nravo, Jan 18, 2009.

  1. nravo


    Anyone know what it's called (I know I am setting myself up here for amateur comedians) when you say, but 1000 of XYZ, it goes up say 10 percent. You sell you original purchase and leave the 10 percent profit on the table to run? Is it an anti-Martingale? Anyone do this?
  2. Redneck


    FWIW Sir

    I call it

    1.) Locking in profit

    2.) Scaling out some but letting a winner run

    3.) You may even want to scale some shares back in - depending on your assessment of current conditions

    Nothing wrong with it in my book - I like profit
  3. agreed if you hit a profitable trade and hit first target it doesnt hurt to cash out a percentage then let the remaining run you can use a trailing stop that will move for you its almost worry free there are times and circumstances to not use it but generally its a good idea...

    if your not consistent with having winning trades with even or higher risk:reward this maybe the strategy you need many systems are unprofitable without this approach.
  4. nysestocks

    nysestocks Guest

    Buy 1000 AA @9.10 with 20 cent stop, filled, AA goes to 9.31, 21 cent profit but you hold, drops back to 9.10, you still hold, drops to 8.90 and you are stopped out for $200 loss + commissions.

    You were making what you were willing to risk, but for some reason, you were not willing to take it!

    What does this tell you about you, as a trader?
  5. There is a fine line between being greedy and "letting winners run." Lots of contridicting advice (not from you, but in general) regarding those 2 things.
  6. nravo


    What if I had sold 79% of the position at 9.31 and just let the 21% run ...
  7. _PD_


    Zero Cost Averaging
    from Daryl Guppy, Better Stock Trading
  8. nysestocks

    nysestocks Guest

    Well, lets see!

    Profit = 790 x .21 = 165.9
    Loss = 210 x .20 = 42.0

    Gain = 123.9 less comms

    As for what is best, it should be obvious that the answer is, the way that makes you the most money!
  9. J J aapl

    J J aapl

    its called being smart :)