What's Worse: Missing the Move Entirely or Giving All Your Profit Back?

Discussion in 'Risk Management' started by schizo, Apr 21, 2010.

  1. Scale in and scale out.

    I like holding positions for a longish amount of time; I've recently started to trade around a core position -causing me to scale in and out in the same week. I don't hold a larger position than makes me comfortable. Once I've scaled in and am comfortably in the green, I'll set a limit order to scale in a bit more should the asset move against me. When that executes, I'll set a limit order to close that added position for a profit.
    At the moment, I'm strictly trading the EUR/USD but this technique's working for me. I'm hoping to see the EUR pop back up to 1.345 to add to my short. If it executes, I'll put in an order to cover at 1.34. As I write this, the EUR's trading at 1.3388.
     
    #11     Apr 21, 2010
  2. schizo

    schizo

    A little bit of both today. Needless to say, felt like an idiot. I'm in need of a redemption.
     
    #12     Apr 21, 2010
  3. neither is bad i prefer to be involved when nothing is happening- hard to lose money that way and you can attack the market all day long with death by papercuts.
     
    #13     Apr 21, 2010
  4. NoDoji

    NoDoji

    With 2 or more lots, you can ring the register on some and get paid for your effort no matter what.

    With 1 lot it's trickier, so for me it depends on the setup. This morning I was shorting CL near the low, looking for a breakout and another push down. Because such a strong move down like the one this morning attracts bottom fishers I felt that a lack of follow through could quickly result in a strong reversal, so I either moved stop to b/e quickly or trailed my stop not far. I was expecting follow through for particular kind of price move.

    When I short a lower high or long a higher low, that's different than a breakout trade, and I usually have the patience, even with one lot or a small position if it's a stock, to let price move to my target.
     
    #14     Apr 21, 2010
  5. schizo

    schizo

    From my own experience, the largest gain usually comes from capturing the entire move.

    There are times when I could successfully micromanage by jumping in and out of these moves but, more often than not, I would end up making far less than had I left it alone.

    When the move is short-lived, that's when real skill kicks in IMO. Is it better to take your profit, however small, and look for another opportunity or do you sit tight until either it goes higher or stops you out at breakeven?

    But, more importantly, was this envisioned by you the trader in advance? In another word, did you have a contingent plan? As another poster stated above, did you trade according to your plan?
     
    #15     Apr 21, 2010
  6. risky63

    risky63

    I disagree.......
    all in or none.
    use a combo of ma's and "other" and you will capture the bulk of the move.
    yes I do have something special in the other dept. and it keeps bad entrys out 90 % of the time.
    I wish I could share ......but it took too long to figure it out.
    I will say that it is easy to get.......keep it simple!
    exit is a 2 ma confirmation........
     
    #16     Apr 21, 2010
  7. schizo

    schizo

    If you haven't already figured it out, we don't like those who use big words around here, especially if you can't back it up with action. I dunno what you trade (stocks, futures, forex?), but post some trades in realtime and I'll be happy to get down and dirty.

    BTW, did you say "keep it simple"? Most of us are PA purists. We don't even use MAs for crying out loud. Geez! :D
     
    #17     Apr 21, 2010
  8. risky63

    risky63

    you got it .....butttterrrr cup

    should I pm you when I enter my trade tomm.?
     
    #18     Apr 21, 2010
  9. schizo

    schizo

    LOL, you can grease me up really good. On that note, if you trade CL, I welcome you to stop by the CL Redux thread and give us goose bumps with your magic potion (errr, I mean your MAs). :cool:
     
    #19     Apr 21, 2010
  10. i like to make a minimum nut on the first couple of trades. then with a few pennies in the bank trade multiple lots scaling out and moving the stop to break even on whats left. this way you always go home with pizza money :D
     
    #20     Apr 21, 2010