I started with a 20% gain but found I missed out on lots of potential gains when stocks just kept on going. I'm now totally discretionary. It depends on the stock and the market. I rarely sell all now after strong gains. Usually I'll sell a third or a half and then see how the stock goes after that. If it keeps going I might even top up again. I rarely enter 100% either. If I see an entry I might get in with just a third of what I would be aiming for with a total committment. If the trade is going OK then I'll add to the position. If it tanks, I sell and minimise loss. The problem with trading like this as a beginner is that you get attached to stocks and without strict rules you will hold stocks for longer than you should, expecting them to bounce back, or not lock in profits by becomming gready. The most important rule though with 'trading' is to not lose money. If a trade goes wrong, get out and save your cash for another day. In summary, I have a 'plan' for each stock I buy and write it down. Then amend as the situation develops. There is just too much to post into a single reply so I'll leave it there for now. I must say, not having a solid plan (like me) can lead to failure. The saying 'Plan your trade, and trade your plan', is a truism. This is not 'investing' of course, which is a whole other story.Just trying to find out what other people use as exit strategy ? I am still trying to get mine ironed out..
Do you use an indicator ? or a trailing stop loss. What persentage do u use ?
2% seems a bit tight for a stop loss. 5-10% would be more the norm for a blue chip, and wider for a spec. You should probably adjust your stop as the sp goes up, to create a 'trailing stop'. Personally, I use support lines as a trailing stop. If a stock comes back down to support and it's breached, I exit and wait for another opportunity. This works OK with stocks conforming to support and resistance lines in a trending market, like the last 3 years, but during turbulance, this is much less reliable.Kennas, thanx a lot for your reply. The problem is for Stop Loss I have 2% set as a hard rule, which means if a stock that I am trading takes a 2 % hit I am out, no questions. BUT, if a stock a going up I donno when it is finished its run and when its time to take profits and exit. Sometimes I exited early and others times I lost out cos I stuck too long with it.
Kennas, thanx a lot for your reply. The problem is for Stop Loss I have 2% set as a hard rule, which means if a stock that I am trading takes a 2 % hit I am out, no questions. BUT, if a stock a going up I donno when it is finished its run and when its time to take profits and exit. Sometimes I exited early and others times I lost out cos I stuck too long with it.
I think you maybe confusing Position size risk with Stop loss.
You can still only risk 2% of your trading capital and have a 20% stop on price.
Google Fixed fractional position sizing.
Kennas, thanx a lot for your reply. The problem is for Stop Loss I have 2% set as a hard rule, which means if a stock that I am trading takes a 2 % hit I am out, no questions. BUT, if a stock a going up I donno when it is finished its run and when its time to take profits and exit. Sometimes I exited early and others times I lost out cos I stuck too long with it.
thanx a lot Nizar. Its very helpful. Clears a lot of points.
I'll explain my earlier question with an example. I had bought ZFX at 16.75 (green line on chart) and took an exit on 17.61 (red line on chart) . ZFX ofcourse went on to make it to 17.90 before finally turning around.
Was there any indicator that would have told me to hang on to the ride ?
thanx a lot Nizar. Its very helpful. Clears a lot of points.
I'll explain my earlier question with an example. I had bought ZFX at 16.75 (green line on chart) and took an exit on 17.61 (red line on chart) . ZFX ofcourse went on to make it to 17.90 before finally turning around.
Was there any indicator that would have told me to hang on to the ride ?
WOW ! losts of great info here to digest.
I guess its time for me to find a mentor. Anybody here with lots of experience and some spare time to show me the right way please.. it would be extremely appreciated...
thanx heaps...
thanx a lot Nizar. Its very helpful. Clears a lot of points.
I'll explain my earlier question with an example. I had bought ZFX at 16.75 (green line on chart) and took an exit on 17.61 (red line on chart) . ZFX ofcourse went on to make it to 17.90 before finally turning around.
Was there any indicator that would have told me to hang on to the ride ?
thanx a lot Nizar. Its very helpful. Clears a lot of points.
I'll explain my earlier question with an example. I had bought ZFX at 16.75 (green line on chart) and took an exit on 17.61 (red line on chart) . ZFX ofcourse went on to make it to 17.90 before finally turning around.
Was there any indicator that would have told me to hang on to the ride ?
Moving Averages
Moving averages are the simplest smoothers. Before widespread use of PCs, one could easily keep up the data smoothing with a hand calculator, as the only data necessary for the calculation were the price being added and the price being dropped. That exercise warned users to “Beware the dog that bites twice”, which is to say that the moving average was tremendously affected by not only the new day, but the day being dropped. That “dog bite” problem can be significant in shorter term moving averages. Most traders who have always used computers are unaware of dog bite problem.
Moving averages weight each day the same, and can be performed over moving periods of whatever length and segmentation you wish. By segmentation we mean weekly or monthly, but you could just as easily consider ever-other or every-tenth day. You should also consider weekly averages with the week ending on a day other than Friday.
As stated above, moving averages are the best way to smooth data of known periodicity, and certain market data is hugely periodic.
http://www.fdcusers.com/A Survey Course on Data Smoothers.htm
A trendline would have kept you in as well..
trendlines do know where the reaction lows are because
that is where you draw them.
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