Unemotional exits

[T2000]

Hey all, new member, first post.
Just joined to try to get people's opinions on exit strategies.
I use EOD trading data to generate entries and have an equal weighted portfolio of 8 positions which are immediately re - invested if sold. Positions are held for up to a month or so if not stopped out sooner.
I always use stop losses to exit positions as my trading is rules based to avoid emotional decisions.
My stop loss levels are set at around -5% manually (EOD), and then tightened to around -3% once profit goes over 12% and these levels seem to be working OK but it is quite tedious placing and adjusting stops continually, so I have been toying with the idea of a once only trailing stop at the beginning of the position, set at around -6%. My broker (Etrade) only allows a trail by amount, not a percentage, so the stop will automatically tighten to some extent as the price rises.
Obviously with the trailing stop the level will be dragged up with stock rises. The dilemma is trying to pick a level which will allow the stock to bump around a bit without getting stopped out prematurely while protecting the downside and locking in profits, both with manual and trailing stops.
Does anyone have a similar exit strategy and to the one above and have you experimented with manual versus trailing stops and levels?

Cheers and good luck everybody.

 

[tech/a]

Too conservative for me.
Trading futures and shorter term I
Want to get onto momentum and stay in it
Until it stops. If a trade reverses on me long or short
(futures) I’m not going to allow it to wallow between
Buy and stop
I’ll raise the stop If I can get to B/E then I’ll loosen a little.

That’s me though a long futures trade is a few hrs.

 

[T2000]

Too conservative for me.
Trading futures and shorter term I
Want to get onto momentum and stay in it
Until it stops. If a trade reverses on me long or short
(futures) I’m not going to allow it to wallow between
Buy and stop
I’ll raise the stop If I can get to B/E then I’ll loosen a little.

That’s me though a long futures trade is a few hrs.

Thanks for the reply. So you use manually placed stops rather than trailing? And adjust them based on feel or rules /sytem based? Cheers.

 

[Chronos-Plutus]

Hey all, new member, first post.
Just joined to try to get people's opinions on exit strategies.
I use EOD trading data to generate entries and have an equal weighted portfolio of 8 positions which are immediately re - invested if sold. Positions are held for up to a month or so if not stopped out sooner.
I always use stop losses to exit positions as my trading is rules based to avoid emotional decisions.
My stop loss levels are set at around -5% manually (EOD), and then tightened to around -3% once profit goes over 12% and these levels seem to be working OK but it is quite tedious placing and adjusting stops continually, so I have been toying with the idea of a once only trailing stop at the beginning of the position, set at around -6%. My broker (Etrade) only allows a trail by amount, not a percentage, so the stop will automatically tighten to some extent as the price rises.
Obviously with the trailing stop the level will be dragged up with stock rises. The dilemma is trying to pick a level which will allow the stock to bump around a bit without getting stopped out prematurely while protecting the downside and locking in profits, both with manual and trailing stops.
Does anyone have a similar exit strategy and to the one above and have you experimented with manual versus trailing stops and levels?

Cheers and good luck everybody.

Sorry; I trade in the moment in the short term ~1 month. I don't use stops at all when I trade short movements and short timelines.

 

[AfsalMe]

To lock some profits while using trailing stop, best approach will be closing trades partially and let the remaining to trail.

 

[tech/a]

To lock some profits while using trailing stop, best approach will be closing trades partially and let the remaining to trail.

Best approach? Why?---its an approach.
What do you mean leaving the rest to trail?

 

[AfsalMe]

Best approach? Why?---its an approach.
What do you mean leaving the rest to trail?

By trial I mean to use trailing stop. Buy this we can catch big trend movements

 

[willoneau]

Hey all, new member, first post.
Just joined to try to get people's opinions on exit strategies.
I use EOD trading data to generate entries and have an equal weighted portfolio of 8 positions which are immediately re - invested if sold. Positions are held for up to a month or so if not stopped out sooner.
I always use stop losses to exit positions as my trading is rules based to avoid emotional decisions.
My stop loss levels are set at around -5% manually (EOD), and then tightened to around -3% once profit goes over 12% and these levels seem to be working OK but it is quite tedious placing and adjusting stops continually, so I have been toying with the idea of a once only trailing stop at the beginning of the position, set at around -6%. My broker (Etrade) only allows a trail by amount, not a percentage, so the stop will automatically tighten to some extent as the price rises.
Obviously with the trailing stop the level will be dragged up with stock rises. The dilemma is trying to pick a level which will allow the stock to bump around a bit without getting stopped out prematurely while protecting the downside and locking in profits, both with manual and trailing stops.
Does anyone have a similar exit strategy and to the one above and have you experimented with manual versus trailing stops and levels?

Cheers and good luck everybody.

Hi T2000 , the exit will always be the hardest thing to do. Deciding how much you are going to risk, be it as your trade moves into profit or the risk you take when you place your initial trade has to be chosen.
If you are finding moving your stops daily tedious then possibly moving them on a weekly time frame might help. Also you need to decide (usually with back testing) how far away your happy to trail your stop. Skate covers this quite well in his Dump it here thread which gives a few idea's.

 

[systematic]

It’s really hard to answer (which is why there are so many posts like this that I can’t reply to), because for me I have the same answer 99% if the time.

Namely: the answer to this question is a function of your system. Therefore, unless someone is running the same, or very similar system, also WITH similar goals; how can their answer be relevant to you?

You are running a system to take emotion out (music to my ears), have you been able to backtest?

Anyway, that said, thoughts from your post:

Is it just a matter of switching brokers?

Are there auto tools like a chart program that will just send you an alert when you need to do something?

My hold time is longer than yours but checking in less or more often doesn’t make much difference in what I run, so the persons suggestion to check moving out to weekly (for your hold time) is worth a look.

Next, I’d challenge the idea that it’s that much hassle to do a few EOD percentages. Are you doing this on a calculator? Use excel or google sheets to calculate for you so you are just plugging in 8 EOD prices. Or hey, have it set to get the prices for you and calculate!

Finally, you said, ‘I always use stop losses to exit positions as my trading is rules based...’
Do you realise that having no stop is also a rule? Have you tried time based vs percentage, or opposite signal, for example?

Finally, (really this time), you correctly said that the, ‘dilemma is trying to pick a level which will allow the stock to bump around a bit without getting stopped out prematurely while protecting the downside and locking in profits.’

Well, that’s a good observation. You may in fact find that no stop works better. You could also play around with tying your stop to the volatility of the stock (very common) rather than a percentage, to allow wild stocks to jump about and slow movers not so much room.

Best of luck, and welcome to the forum!

 

[Austwide]

I have set stops and have had many stock sold by taking to my stop and then taking of again. It worked well on the being unemotional side but I think cost me more overall. OK you can always rebuy (but never have emotional?) but have to pay more and if already held several months , restart the 12 month hold for CGT discount. (Tax consideration shouldn't be part of the selling decision but are a factor sometimes).

IMO I think stops are better set on closing price and then acted upon the next day. (emotion is back though). This does lead to missing the trade some times for whatever reason and opening price may gap down and screw you.

I am rethinking my trading plan and currently liking the Close price method with a very wide stop loss.