# The art of taking profits?



## darkhorse70 (13 August 2014)

Im sure this has been covered numerous times in different ways. But im just wonderng if there is one method of taking profits, mathematically or in terms of odds, which increases or gives the best outcome in the long run. For example i was looking at a stock and it hit the first significant point of resistance. It dropped all the way back down to its support level, went abit below then rebounded. I dont want to give all the profits back by not moving up the stop loss and worse yet maybe even going below my entry price. However you dont want to miss an explosive upmove aswell.

I guess it all depends on your trading strategy and size. For me trading capital would be small and probably in the overseas market increasing brokerage fees. Hence the dilemma of constantly hitting stop losses would be bad.

My question is, is there some type of mathematically proven method which increases your odds of success in the long run when it comes to taking profits for a trading strategy aimed for holding positions for days to weeks to even possibly months.

Or is it more of a every situation is different and thats when experience comes into play?

Thanks


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## darkhorse70 (13 August 2014)

Personally im thinking, if the profit is big enough, set a tight stop loss abit below resistance and if it gets triggered, you maintain most profits and re enter after the resistance is broken and set a new stop loss.


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## Wysiwyg (13 August 2014)

darkhorse70 said:


> Or is it more of a every situation is different and thats when experience comes into play?
> 
> Thanks



That is correct though fixed profits can be profitable, maximising profit is the tricky bit.


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## tech/a (13 August 2014)

Just like entries there are better exits but not perfect exits.
Rule of thumb
Short term trades tight stops at pivot lows in lower timeframes
Longer terms wider stops on pivot lows in higher timeframes.

Pivots supported by volume have more validity


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## Jens (13 August 2014)

We all trade different to each other, so you are likely to get many suggestions 
I day trade and keep a close eye on the charts, when I am in a trade.
I will pay attention to the previous range and watch how strong the push is in
my direction. AND I will use my gut instinct, which is a bit hard to write into a
trading plan, but it actually works quite often


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## Wysiwyg (13 August 2014)

darkhorse70 said:


> Personally im thinking, if the profit is big enough, set a tight stop loss abit below resistance and if it gets triggered, you maintain most profits and re enter after the resistance is broken and set a new stop loss.



 I think you mean setting a trailing stop under support.


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## burglar (13 August 2014)

The oldest clichÃ© I know is "leave something for the next guy!"
The oldest retort I know is "leave something, ... but not that much!!"


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## pinkboy (13 August 2014)

What's 'taking profit'?




pinkboy


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## burglar (13 August 2014)

Its like when ya buy NAB for the 7% divvy  and it goes up like 12% (after brokerage) in six weeks and the first divvy is still months away and you do all the sums in your head and then you sell them.


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## darkhorse70 (13 August 2014)

Wyswig yeah trailing stop thats what I meant haha. I get everything you guys are saying. What im saying is for example some traders sell whatever they have to, to cover their risk. Obviously you can sell different ratios etc. Has any one found some ratio to sell at the next resistance level so that you still can lock in profits plus enjoy a possible break out? There has to be some mathematicap sweet spot haha or strategy?

Haha burglar


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## Wysiwyg (13 August 2014)

You should be playing the ASX Stock Market game. You could then start experiencing what goes on but I feel you do not have a proven strategy, charting software or trade plan as such. I use Amibroker to run strategy tests and this has helped me immensely.  http://www.asx.com.au/education/sharemarket-games.htm


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## darkhorse70 (13 August 2014)

Wyswig im actually already playing atm. My third time. First 2 times I failed haha. I did good then I crashed and burnt. It taught me what trading stykes im NOT good at haha. Im already enrolled in a uni comp which starts at the end of august. Im playing under my mates name. You can trade forex, cfds etc so I dont knoe how ill fair compared to other students but it will be interesting.


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