Why I Take Small Profits to Catch Bigger Profits

Infrequently trades develop in such a way that I feel no hurry whatsoever to take profits, in fact, I know I should do otherwise, add and increase my size as it moves my way. In most cases, I like to take a quick partial profits on a fraction of the initial position even if it theoretically diminishes the overall gain.

For me, there’s something about ringing the cash register, and laying off part of a leveraged position that settles me down and puts me in a long strong position — where I can manage the rest of the position with greater equanimity.

Now maybe over time, as old trading wounds completely heal up, my need to take partial profits will diminish. But, trades like my recent AMD long come along and remind me why I like to take partials.

It's a good lesson trade for me as the trade imploded, yet due to aggressive trade management and partial profit-taking the trade actually made (to my great surprise) a profit. But, that's not the most important point.

I had trade location long from 34.10 (4/10) and yesterday, (4/12) took larger than normal aggressive profits (one at 35.26 and the second at 35.49) due to the imminent release of earnings. And, on the morning of 4/13 got stopped out of my core (remaining) long at 31.97 for an average liquidation price of 34.24 for a .4% profit.

Now, here comes the psychological kicker — if AMD had stopped me out of the entire long positon with zero partial profits, would I have been too bitten to hit offers in QN (Nat Gas) and put a new long on in a real volatile market and size position correctly? Maybe….then maybe not.

PS: If you want my detailed list of the exact actions taken in stocks (and commodities) and my daily trading plan you can always drop me an email at my blog or send me a PM:

Use the "Send me your BUY LIST" button, right-hand column at: http://www.street-noise.net/articles/

 

Thank you ET for deleting the other posts on this thread while still leaving this thread on the board.

I think the other posts had something to do with the official canned meat of Hawaii, and the frequency of identical posts.

I know, I know... this will probably be deleted to.

blah.

 

In a separate forum, I was just deleted again.

What I said wasn't controversial at all.

Thank you ET. My confidence in you choosing not to censor free speech, has been lost.

BLAH. bLah. BlAh. blah. bLAh. BlaH. BLaH.

Thanks.



ps. I cut and pasted all of my previous posts on NoiseTrader's threads, to a Notepad file on my computer. I'll be re-posting them continually, if they are deleted. I have the freedom of speech. DO NOT CENSOR ME. Especially for juvenile, non-threatening, or non-controversial posts. If I call someone a potty-mouth name, that's understandable, but censoring BLAhs is ridiculous!

 

Got news for you. You have NO freedom of speech on a commercial forum. Get a clue.

 

I agree with NoiseTrader totally. Taking partial profits is sometimes necessary in order to let one of those monster profits run sometimes. And you can definitely have several consecutive positions running on one security (especially with futures) each with its own signals/entry/exit.