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Stop-loss closing is not discussed here, only take-profit closing. I've solved opening and stop loss, but am confused as to when to close at profit. When I trade FGBL, I often encounter that the price moves 10tick+ in one direction, and then the price retraces to the origin in a very short period of time. When I close the position, the price returns to the previous direction. And when I stick to the position after taking a profit, the price returns to my opening price, even though I've made more than 30 ticks in profit. I wonder if there is a simple and consistent standard for how other traders close their positions, because overly complex rules can't be consistent, making the theory of large numbers useless.
Can you help answer these questions from other members on NexusFi?
All in/Scale out, there are so many different paths price can take and it's impossible to account for all scenarios. If it comes back to your entry and shakes you out you've softened the loss and have more bullets to put it back on.
Broker: Interactive Brokers & Taiwan local brokers & AMP Futures
Trading: Stocks, Commodity & Index Futures
Posts: 117 since Jan 2017
Thanks Given: 135
Thanks Received: 100
Maybe you can consider use the same entry method to close your position.
For instance, if your method were only buy when close price higher than yesterday's high or sell when close price lower than yesterday's low to get into the market, and you had already bought, then you could close your position when close price lower than yesterday's low.
You'll never go broke taking a profit! But, if you're position trading than you're minimum target price should be 100% ROI cut half the position and trade on house money. If you're daytrading pay attention to price action and never allow a winner turn into a loser.
I swing trade stocks.
My process is to scale in and trail a stop so that after the second buy I won't experience a loss.
I sell 1/2 on a trend line break and the second 1/2 on the break of a swing low.
Exception to this is to sell 1/2 on a high volume day with an above average price move.
This process limits my losses. (Priority #1 is capital preservation)
If I'm fortunate enough to catch a runner, I do quite well.
"The days when I keep my gratitude higher than my expectations, I have really good days" RW Hubbard
Recently, I used an average indicator as an exit signal. The reason is that the indicators of the average type have delays. When the delayed indicators show that the market has reversed, there is no reason to continue to hold positions.
