| Welcome Guest, please sign in to participate in a discussion. | Search | Active Topics | |
Registered User
Joined: 12/29/2008
Posts: 26
|
Can some of the more experienced folks outline how they manage a position once in. I currently have 2 working exit stratagies. 1.) set a fixed stop and target and whichever is hit first executes while canceling the other. and 2.) Once a price target is hit cancel the fixed stop and trail a stop some percent below the high/low. How are others managing exits?
Also, how many days, hours, minutes do your active trades tend to stay open?
Thanks in advance.
George
|
|
Registered User
Joined: 12/2/2004
Posts: 1,775
|
My basic method is to buy each new position in 3 or pieces of about equal size. The first buy/piece I immediately note where a violation of recent support is and place my sell stop there. The stop may be 2% away or 10% away...further than that and I'll most likely skip the trade, then watch and hope for a pullback. As I add to position I try to add as price increases about 2 or 3 percent each step. If avg. price ever gets to about 15% profit I'll move the stop(s) up a bit, but loosened to allow for more daily noise without getting stopped out.
|
|
Registered User
Joined: 2/5/2006
Posts: 1,148
|
george-
why not combine both stategies. sell 50% when condition #1 is meet and sell the other 50% once condition #2 is met.
i'll usually stay in until i get a sell signal, or stopped out.
|
|
Registered User
Joined: 12/29/2008
Posts: 26
|
As of right now my sell signals are hitting my target price or hitting my stop. I am reading the indicators thread to add to my skills, but i'm not there yet.
fpetry, it looks like you exit based on stops only. Is that the case or am I over simplifying?
funny, your suggestion is an easy tweak to my current strategy. I will look at incorporating that in my next trade.
Thanks all
George
|
|
Registered User
Joined: 2/5/2006
Posts: 1,148
|
i use a similiar strategy. i'll establish a short term target, then lock some profit in when its hit. then wait for a sell signal given by an indicator to sell the 2nd half. sometimes the second half will run.
good luck
|
|
Registered User
Joined: 12/2/2004
Posts: 1,775
|
QUOTE (george631) fpetry, it looks like you exit based on stops only. Is that the case or am I over simplifying?
Well I always have a sell stop(s) for exiting if price moves against me, adjusting/trailing on how the price and chart pattern evolves, but I never adjust stops lower, only higher. FWIW, I don't like profit targets per se for a place to exit, I prefer to place a tight stop on maybe 1/3 the position if price has made a really good move, and at same time move the other one or two stops up but still loose for the remainder. The idea is to let profits run as high as they want to go....keep an eye always on how the chart evolves on where exactly to adjust the trailing stops. Exceptions for my stop exiting rules would be to sell at least part of a position right before earnings, or maybe a stock in same sector just came out with news that caused it to get hammered where I'll take some off. Everyone has their own method that they tweak over time, mine is no better than anyone else's. As you formulate your own style it's good to hear from others, but don't necessarily try and copy a method exactly, just use common sense and remember that you may have a different risk profile, and that size of position, time horizon, pain threshold, are always important factors.
|
|
Registered User
Joined: 2/21/2007
Posts: 797
|
George: check the worden reports
7/26/07-----8/29/06---4/6/05----4/22/05---1/6/06---9/9/05---7/20/06---6/1/05---8/2/06---4/29/05---
knights exits
|
|
Registered User
Joined: 3/21/2006
Posts: 4,308
|
Good exit strategy is to analyze price action. If price breaks down below support levels on strong volume. If price breaks below trend lines. If price is in an up trend and recently made a new high but has failed to reach that level on the next thrust (in other words price begins to make lower highs) Exit if price bounces down off resistance levels.
Once you have played the stock according to your planed goals (In other words you had an entry that you planed and an exit strategy before you even entered the stock, you made sure that the trade fit your criteria for risk, and reward). Exit if price takes out a recent swing low. You must protect profit and learn price action. Study charts and you will see where you should be exiting your trades
|
|
Registered User
Joined: 12/29/2008
Posts: 26
|
I want to thank you all for your comments and give a quick update on how I am placing exits today. Right now when trading long I am entering "one cancels the other" orders with a limit sell on one side and a stop loss on the other. I have not found a way to enter an order that would be a stop loss on one side and a limit sell that becomes a trailing stop once the limit price is hit on the other. When trading short I set a target price which is aggressive and move my stop to follow a running trade fairly frequently. If I get a good gain I would book half the gain and follow the other with a stop and allow the stop to take me out. I do this because shorts seem to be running much more than longs right now but would swap if/when that changes.
BTW...I trade with Fidelity and find shortable shares about 60% of the time. This is to bad as I had to pass on a few profitable trades due to this. Any suggestions for a 2nd broker where shortables are more available?
Thanks in advance.
George
|
|
|
Guest-1 |