You Have 5 Must Know Tips for Traders or Investors: They are? Why?

[willoneau]

I agree and wanted to find out how others controlled their risk.

 

[Zaxon]

just in case i die.

How old are you?

 

[HelloU]

I agree and wanted to find out how others controlled their risk.

thousand little devils in the details though when reading what others write .... but same here #metoo

ooops, is that ur doorbell ringing?

 

[Zaxon]

when peeps say "let ur profits run".... great advice but what does that really mean? at some point u have to make a decision to sell.

The two main ways of exiting a trade are a stop-loss (mostly about capital or profit preservation), and a system generated exit, such as when a MA1 crosses MA2, etc. The system exit occurs when the conditions upon which you enter the trade no longer exists. So in your case, once the trend has ended.

How loose to set the exits depends on your timeframe. A trend trader would have much tighter exits than a trend investor. There's no "right" level of tightness. It's the balance between protecting your profits (tight) vs gaining possibly higher profit (loose), since you allowed you trade to run further.

 

[HelloU]

How old are you?

about 6 when i write (say) penis ....lol

that other is important to me and is why i brought it up (cos peeps rarely talk about that aspect of portfolio management). (leaving now to say the next)

 

[willoneau]

I'm not so interested in entry but curious about how risk is managed and exit styles are used.

 

[willoneau]

I use three different exit strategies one for currency, weekly trend trading and another for my breakout specy trading.

 

[Zaxon]

about 6 when i write (say) penis ....lol

I won't even pretend to know what that means.

 

[HelloU]

The two main ways of exiting a trade are a stop-loss (mostly about capital or profit preservation), and a system generated exit, such as when a MA1 crosses MA2, etc. The system exit occurs when the conditions upon which you enter the trade no longer exists. So in your case, once the trend has ended.

How loose to set the exits depends on your timeframe. A trend trader would have much tighter exits than a trend investor. There's no "right" level of tightness. It's the balance between protecting your profits (tight) vs gaining possibly higher profit (loose), since you allowed you trade to run further.

i used to think there was a difference between swing profits and investor profits and now i am not so sure - cos i would rather not have have to look for another entry if i can successfully hold by adjusting criteria (as a probability thing), example, hold out 2 more days and it statistically goes up again type thing so not sell the stock ..... whatever the reasons for exit there must be something i can write down as to why i did it - otherwise i cannot learn from it.

all that ma cross (ema/PC for me with vol, whatevs) and other junk is the groin scratch for me. with all the probabilities and charts in the world there are no still no certainties. Its always a guess - just educated.

 

[Zaxon]

i used to think there was a difference between swing profits and investor profits and now i am not so sure

Mostly, it has to do with timeframes. Here are the definition of swing and day traders:



By contrast, an investor wants to hold for as long as possible: months, years.

One other possible distinction: traders will often take profits should the share price reach a target. More often, a trend investor may not have a profit target. Just keep holding it forever until the trend ends.

 

[willoneau]

I thought swing trading was a mean revision type of trading?

 

[Zaxon]

I thought swing trading was a mean revision type of trading?

That's correct. As well as a different time scale to a day trader, they also tend to trade the trend in both directions.

 

[rnr]

That's correct. As well as a different time scale to a day trader, they also tend to trade the trend in both directions.

View attachment 94988

The entry for a mean reversion trade is totally different (i.e. as in opposite) to that of a swing trade.

 

[willoneau]

The entry for a mean reversion trade is totally different (i.e. as in opposite) to that of a swing trade.

I don't trade either way so am interested in your take on it ?

 

[HelloU]

Mostly, it has to do with timeframes. Here are the definition of swing and day traders:

View attachment 94986

By contrast, an investor wants to hold for as long as possible: months, years.

One other possible distinction: traders will often take profits should the share price reach a target. More often, a trend investor may not have a profit target. Just keep holding it forever until the trend ends.

soz, what i meant was i used to think about the PROFITS for each one differently (and treat them differently) .... now i treat them the same and use the same sell triggers.

 

[Zaxon]

The entry for a mean reversion trade is totally different (i.e. as in opposite) to that of a swing trade.

That seems right. Swing trading is a subset of trend trading.

Mean reversion trading:

When the current market price is less than the average price, the stock is considered attractive for purchase, with the expectation that the price will rise. When the current market price is above the average price, the market price is expected to fall. In other words, deviations from the average price are expected to revert to the average.

 

[rnr]

@willoneau

Much easier to just type "mean reversion trading" into a web browser and view the results. This will also help answer the numerous questions that will follow your initial read.

 

[Zaxon]

swings on pumps and dumps (pre-cash raise or rights issue or whatevs) i get having a target and (maybe) sticking to it cos it is pure hype and daytraders (but selling into a constant uptrend is not a great strat??)

A pure trend trader would never sell until the trend is over. Profit targets don't come into it, nor does selling during the trend.

However, you could overlay on top of trend trading, stop-losses for capital protection, and profit taking for profit crystallization.

 

[willoneau]

Zaxon's quote is what I thought mean revision trading was.

 

[Zaxon]

Zaxon's quote is what I thought mean revision trading was.

Sounds like you're ready to graduation Trading Academy then. Except revision is to review something: as in revise. Reversion is to go back to a previous level: as in revert.