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.
- 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.