Need ideas on taking profits - and how much is enough?

[pringy]

Hey guys,

I think I've finally started to reach more consistency with my trading and starting to make a profit, but I'm still struggling with a few things, namely with taking profit.

I guess sometimes it depends on what sort of trading strategies I use, and how much potential is there for profit. In general, I'm a technical trader, with 3 key strategies - being Divergence, Trend Following, and Breakout. Nothing fancy!

Discounting "hyper trading days", where you get movements of 200 pips and above, I just want to get the crowd feeling of...:

a. How many pips would you be satisfied with booking? 20? 30? 40? 50? This would give you an emotional joy feeling rated.. say... 7 out of 10.

b. Let's say you sold out early - and it continues to go up - how many pips that you missed out on, that you would feel OK - i.e. if you missed out on another 20 pips... 30 pips... before you start banging your head against the wall.

c. Do you have any good technical strategy for exiting a trade?

Cheers guys

 

[Pharaoh]

My usual strategy involves watching the trade head straight to its stoploss. :hissyfit:


Seriously though, don't treat exiting a trade as an all or nothing deal. Phase the trade out in chunks. If you get 30 or so pips, close part and bring your stoploss up. If you get another 20 or 30 pips, close more and move stoploss to break even or a few pips in profit. At this point, you can either set fixed targets to scale out of the remainder of the trade or just slap on a trailing stop and ignore it.

 

[Shane of Oz]

Hey pringy,

Personally, I use trend channels drawn on several different time frames to find my TP levels and also use a trailing stop as backup.

When I manage to get onto trades that don't immediately target my stop loss.....
Quite often the trade will start off great then reverse just enough to hit my stop, then turn back and waltz right up to where it would have hit my TP.
Sometimes the price shoots straight through my TP closing my trade and keeps on going way further.

While these trades can be frustrating, I would much prefer to have that small profit locked in and my margin ready for the next trade than to open myself up to more risk. Less risk = a better night's sleep.

 

[pringy]

Thanks guys... yeah.. it's always a bit of a dilemma - sometimes if you think about it, taking 40 pips consistently, despite missing out on another 40 pips, will make your life very comfortable!

Certainty versus high risk.

Ah well.. if someone has the holy grail for booking profits... do let us know