Now, I'm getting thoroughly confused... How is using a trailing stop to maximize gains picking a top? To me it's doing the exact opposite.... I use a trailing stop because I don't know where the top is. I have threshold in place to stop me out if it drops....... When I enter a trade I place an intial tight stop based on TA... If I'm right and the stock goes up I begin to widen my stop out and let it run trailing it up as the stock moves.... If I was trying to pick a top - I would say "here is the top, I'm going to sell" - How does a trailing stop do this? Yes, I can use TA to see support & resistance. But, if I'm in a winning trade and using a trailing stop by defining these points... I can see when support gets broken and that is my sign to get out and never turn back..... That is how I trade..... I understand targets - As I said, I refuse to take a trade I don't think I can get a 3:1 on - But if we are in a rally market and it wants to give me more, why should I prevent it from doing so? I wonder if what we are running into here is a difference in styles? Ramoteur, you say you daytrade the uncertainty using 5 min charts and such... I don't daytrade, and probably couldn't daytrade my way out of a wet paper bag at this point, I'm a swing/position/longer term trader.... Sometimes my trailing stop gets taken out in a couple days, sometimes a couple weeks, sometimes a month.... But as long as the trend is up - I stay with it till it hits my stop... Like I said, I'm learning - I've been profitable since coming back to trading and I'm outperforming the S&P index.... Do I need room for improvement - definetly... That's why I come to EliteTrader b/c maybe I'll learn something.... I want to give an example of what I'm talking about when I say I let my gains run to give you guys an Idea what I mean.. I posted a chart of TEX a trade I did back in the May-June timeframe that I got stopped out on my trailing stop.. This was a 3:1 trade that I rode half my shares on to maximize gains..... Obvioulsly this trade worked - I have others that don't, but this is just an example to give an idea of what I'm talking about.... Ramoteur & damir00 - you guys can critique it as you see fit.
Well, the forum said my chart was too big, I don't know how to downsize a JPG........ Anyways - I'll post the trade.......... 5/27 - I entered trade at 17.70 Stop loss was set at 17.30 when trade was initially placed 6/4 - I sold half my shares at 18.74 This was based on the obvious resistance point shown at 19.00 - I wanted to get out half my shares before reaching it.... At this point I moved stopped to break-even and then trailed it after it broke resistance... Prior resistance becomes support thinking here..... 6/19 - I was stopped out of my trailing stop at 19.87 Like I said, this trade worked 55% of my trades don't since I have came back to trading........
to be honest, i no longer have a clear picture of how it is you trade. you said you use stops, then you referred to riding half a position to "maximize gains" and else you mentioned riding a trend for all it is worth. the way it comes across to me - and it could certainly be a perception problem on my part - is that you aren't especially consistent in how you close out positions.
Damir, you probably can't figure out how I trade now, because I use so many different strategies - not even I can figure it out sometimes - hehe.......... The only hard firm strategy I won't change no matter what is a solid money management strategy... For example I won't take trades where the risk exceeds the reward, position sizing, etc.. That is exactly what I am working on... I am working on a clear defined strategy as I type this, so I can become more consistent in my approach.... I am going through the trial & error of developing a system I am comfortable with and that works.... Successful traders aren't built overnight - I'm going through my learning curve.... I just want to keep my risk small and not take big losses. If I stay at least breakeven over the next year - hopefully make a little bit.... I'll be happy When I quit trading I after my Ameritrade blowup - I studied trading for 8 months day in, day out, I am now back for the past 3 months.... I am using strategies that are sound, but I'm going through the development of a clearly defined strategy instead of this "cluster****" of strategies I'm using now..... Hopefully, you get what I'm saying
bltrading, no one is saying that your strategy is wrong. If you re-read the post, I said that I swing until my target is met, and then I continue to daytrade the stock with 5 & 15 min charts. Iâll reiterate my position on this by saying that âsupport and resistance are CAPSâ, some are softer than others, which means price action can punch through or the price action will face pressure (buying or selling). By using trailing stops into these âturbulentâ zones you may be able to squeeze more out of the trade. I use to trade (swing and day) that way, and âIâ have found that itâs less stressful to take my target on the swing and day trade the turbulence. The trailing stop is also less effective in less liquid stocks (thin price levels). I posted a QCOM trade here not that long ago. It was a âScaling Swing Tradeâ, I trailed my stops because I was scaling in. QCOM penetrated and held former resistance zones, which then became support and served as new floors, âTodayâs ceiling is tomorrowâs floor, todayâs floor is tomorrowâs ceiling.â These new floors were used as trailing stops. When Iâm not scaling I hold a firm target and stick to it, which is part of my âPersonal Trading Planâ. Again, Iâm not saying that youâre wrong, everyoneâs plan and strategy is different. Iâve taught many my strategy and it has allowed them to play the BOOM of the nineties, whether the long March 31 storm and play the BUST all with success. I have nothing to lose or gain, what you do is of no financial consequence to me, Iâm only here to help you (and others) and I enjoy the discussion. As long as the strategy works for you then you donât need to debate it with anyone. However, be very clear about what you are doing, and the second you lose confidence you need to re-evaluate. Good luck.
yeah, i do now, thanks. hey, this game is an endless learning process, sounds like you're putting a lot of thought into it and i hope it all works out for you!