StockFetcher Forums · General Discussion · Closing positions<< >>Post Follow-up
arby347
87 posts
msg #65860
Ignore arby347
8/5/2008 8:27:12 PM

So much wisdom has been shared on filters to screen for commencing a position.

How do you make a decision to take a profit? How do you make the decision to sell for a loss?

I still do it "seat of pants" and often have regretted what I did in hindsight.

miketranz
671 posts
msg #65865
Ignore miketranz
8/5/2008 11:56:12 PM

Knowing when to take a profit comes with experience.You have to condition yourself to sell into a rally or spike in the market.It's all about money management and focus.Regardless of what timeframe you trade,timing is critical.Another method is,sell when a certain dollar amount is made.In other words,say you own 1000 shares of a $10 stock.If your money goal is $500,once the stock hits 10.50 sell it.The amount of profit is predetermined.Sounds good on paper,but in reality,you take what the market gives.No one knows where the markets heading.But one thing you should know,is where you enter,and where you exit.On losses,strict money management is the key to keeping you in the game.Make sure you place a hard stop right after you place a trade.It will force you out of a position going against you.There's no guess work,no emotion.The key to taking a loss is if the position does not move in your favor right from the time you entered it,let the stop take you out.Most advice out there about downside risk or taking losses will put you into the poor house.There's two ways to look at it.Number one,know how much you can afford to lose in dollar amounts,and place your stop accordingly.Number two,you want to enter a trade at a point that if you're wrong,you'll know it right away regardless of the dollar amount,so you can get out fast.Always risk as little as possible.Keep your stops tight.Remember,large losses start from small loses.Trading is a numbers game.Good luck.........

StockFetcher Forums · General Discussion · Closing positions<< >>Post Follow-up

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