Setting profit targets

[stink]

Hi All,

I have just been going over my trading plan looking at how i set my targets for any given trade.

At the moment i am looking at applying a 15% target to a trade, now given the price of any stock and that the potential to make that 15% is there within a few weeks then thats fine.

However i have come accross a few oppotunities where i can see an entry on the stock but because the price of the stock is relatively high that same 15% price move could take a hell of alot longer.

My opinion on this situation so far is to leave it alone and move on to a trade that better suits the timeframe i want to trade in.

I suppose if i had a much larger capitol base it would be more suitable to use these type of stocks for longer term positions?

Anyway just curious on how you guys set your targets, is it specific for evry trade or do you just make your mind up at the time?

Regards Stink

 

[It's Snake Pliskin]

Hi All,

I have just been going over my trading plan looking at how i set my targets for any given trade.

At the moment i am looking at applying a 15% target to a trade, now given the price of any stock and that the potential to make that 15% is there within a few weeks then thats fine.

However i have come accross a few oppotunities where i can see an entry on the stock but because the price of the stock is relatively high that same 15% price move could take a hell of alot longer.

My opinion on this situation so far is to leave it alone and move on to a trade that better suits the timeframe i want to trade in.

I suppose if i had a much larger capitol base it would be more suitable to use these type of stocks for longer term positions?

Anyway just curious on how you guys set your targets, is it specific for evry trade or do you just make your mind up at the time?

Regards Stink

Why apply a target when the potential may be greater?

 

[tech/a]

What size parcel ($ Value) are your trading?

What is your risk? IE As a stop what will you lose if stopped.

 

[Realist]

Well Stink, I am not a trader, but...

I do not believe you should set yourself profit targets.

If you are gonna trade trends, or charts then Trade the trend. If it's going up hang on to it regardless of what your goal was or is.


Also I undestand you may put in about $5,000 per trade??

So 15% of $5,000 is $750, less $40 brokerage, and 50% tax you've made $355. Which equates to about 7%.

Not much is it? You need to bag some big winners to get anywhere, and you're not gonna do that if you set profit targets.

Trade the trend I say.

 

[stink]

HI Tech,

Exactly mate, thats what i was thinking. Why am i doing that?

I suppose because i think you should have a target or a point at which you say, should the price get to here i am going to take my profits.

I suppose another way to look at it would be just let it go until i am stopped out? let the stop be my exit.

Dollar values are not set in stone right now but i am thinking only two positions open of 5k each. Obviously this will change if i am profitable.

So i am looking for a $750 profit - brokerage

Cheers Stink

 

[Nick Radge]

You'll never make a big profit by taking small profits.

 

[stink]

Well Stink, I am not a trader, but...

I do not believe you should set yourself profit targets.

If you are gonna trade trends, or charts then Trade the trend. If it's going up hang on to it regardless of what your goal was or is.


Also I undestand you may put in about $5,000 per trade??

So 15% of $5,000 is $750, less $40 brokerage, and 50% tax you've made $355. Which equates to about 7%.

Not much is it? You need to bag some big winners to get anywhere, and you're not gonna do that if you set profit targets.


Trade the trend I say.

Thanks Realist

God i am a noob lol

I didnt even consider tax.

Oh well, if you dont ask you dont learn.

Stink

 

[ice]

I've often thought the saying "you'll never go broke taking a profit" is the dumbest aphorism in the market.

You always take small profits you can pretty well guarantee going broke or at least ending up an nett loser.

Just my 2 cents worth.


ice

 

[Realist]

Thanks Realist

God i am a noob lol

I didnt even consider tax.

Oh well, if you dont ask you dont learn.

Stink

You don't need to pay tax until late next year of course, but you do need to consider it, you do not want any nasty surprises.

what stocks are you looking to trade?

List a couple see what others think....

 

[Realist]

You always take small profits you can pretty well guarantee going broke or at least ending up an nett loser.

Agreed, try and take small losses and large profits!!

 

[stink]

You don't need to pay tax until late next year of course, but you do need to consider it, you do not want any nasty surprises.

what stocks are you looking to trade?

List a couple see what others think....

well heres one (PPX) where a 15% target takes it just over resistance so probably not a good example.

I cant get my bloody image uploaded at the moment sorry, but have a look at it.

Cheers Stink

 

[Milk Man]

You'll never make a big profit by taking small profits.

How about what i'm doing Nick? (Sorry for thread hijack) My take profit is 1.1 times further out than my stop, historically win/loss is 45%-70% annually, and I only take positive carry (forex obviously). My contention being that this way I know I'm making a profit (and a relatively large one ATM ). Could help selling into strength, particularly with stocks too. Your book led me to the money managment and buy conditions I have in place; it'd be good to have a the whole lot cleared by you .

 

[stink]

How about what i'm doing Nick? (Sorry for thread hijack) My take profit is 1.1 times further out than my stop, historically win/loss is 45%-70% annually, and I only take positive carry (forex obviously). My contention being that this way I know I'm making a profit (and a relatively large one ATM ). Could help selling into strength, particularly with stocks too. Your book led me to the money managment and buy conditions I have in place; it'd be good to have a the whole lot cleared by you .

Off Topic a bit,

People up here in Townsville must be a fan of Nick as all the bookstores are sold out

I have it on order though.

Stink

 

[stink]

ok heres that chart

 

[CanOz]

I reckon it will range for a while Stink. Today closed off the low but volume showed little demand for the stock. Maybe an increase in paper prices will see it try again to break through the double top it created recently, which would be the resisitance you were talking about. If it broke through this and you took profits, you could miss out on a large upside.

 

[CanOz]

A stop loss around 2.90 looks safe.

 

[Milk Man]

Off Topic a bit,

People up here in Townsville must be a fan of Nick as all the bookstores are sold out

I have it on order though.

Stink

I ordered it from Nick on his reefcap site, he signed it too.