Friday, July 25, 2008

Not giving up my profits

Today I had a couple of trades that ran well. A little while back I really want to milk these kind of trade for big profits. Since I am trading small, 100-200 share positions, I always want to capture $1-2 moves. I usually end up giving back all my gains by holding too long. A lot of times the stock would pull back and stop me out before it runs again. In many of my trades I would be up over $1 if I had taken profits, but end up with only 1/3 of that. Now I am not going to be that greedy.

I think taking profits is helping me psychologically, since I am taking in steady gains during the day. I am able to see things more clearly and take more trades.

Here's a 1 minute chart a trade I took in EMN. The stock runs down over $1 and bounces $1. If I hadn't taken my partial I would probably punch out of all my shares near the top of the retracement.

I had a quick profit of $265 in ITT and I took it. If I choose to hold on for a bigger gain, I would have lost most of my profits.

4 comments: said...


FX said...

I'm scalping forex in similar way that you do stocks. I stay on most of my profitable trades 30sec to 3min in the market. I like to be on that one way wave and when I sense it is over I get out.
Before I would try to capture bigger move but it could mess my mind with coming back so I give up on that. I'm so much in regret than if I lose unrealized profit and I'm not clear in my mind for new trade. Some of my worst losses came out when I was in nice scalp win, let it come all the way back and than let it go in a loss, average down...
Leaving much on the table don't bother me so much.

So now I don't worry much about R, just add small profits and in the end of let's say a week it's nice sum.

PRD trader said...

I think you r doing the right thing .As the market has no direction it self,we shouldn't predict any thing even though the chart or the indicator what ever we use is telling us that we r in right direction.

Anonymous said...

I couldn't find your contacts on the page.
There's something I'd like to disscuss about your blog,
my e-mail is:

About Me

I have been trading for 5 years. It took close to a year before I became profitable. I find that I am improving gradually each year. My method of choice is scalping. My edge lies in tape reading NYSE stocks and staying on the side of the specialist. That is the method I learned when I started. As I build up my capital I will try new styles and trade new markets. In late 2006 my trading hit a rough patch after the introduction of the NYSE Hybrid system. For most of 2007, I have been on a search for new strategies that would help me adapt to the market.