Sitting on your hands is sometimes best.
Only trade when you have an edge. Casinos in Vegas never close because they “never” don’t have the edge (in most games).
Exiting Winners can be a hard trade. You don’t want to get out too early, and you don’t want to overstay your visit so to speak.
In order to make the most money and have total sanity around winners because you’ll be executing the same trade effectively for each winner you have. That leads to consistent behavior. Consistent behavior in trading leads to consistent and profitable trading.
No second guessing yourself so you can take solace in your trading plan.
Sometimes you’ll get knocked out.
Sometimes you’ll get to stay in the trade and it will continue to grow.
In my experience in over 25 years of trading, winners will continue to win about 2/3rds of the time (if you trade like me). Very infrequently did I ever “give it all back.” Even if you take a “bad beat” as they say in poker, the odds are in your favor the let the profits run and stay in the trade. Below are 3 techniques you can use to stay in trades longer and rake!
Don’t isolate your trading to fret about one winning trade. Think in terms of how you’ll be in this situation 1,000 times in your career and now you’ll have a plan to handling exits with your winners. That’s how the best traders approach this situation. They have a plan
The LAST place you want to be is to have to make decisions around handling winners each time you find yourself in a winner. That’s emotionally exhausting.
Know what you’re going to do BEFOREHAND and follow those rules.
Here are three potential techniques to exit winning trades:
1) Sell an “N-Day Low” for your Longs where N is the number of days in your look-back. N can be 5 days, 10 days…you get to set it.
2) You can wait for the shorter term moving average to cross below the longer to generate a sell signal. For example, when the 5-Day crosses below the 20-Day moving average, you sell your long.
3) Employ a “time stop” where if the security does not resume its uptrend in “N days,” you sell.
Learn about yourself and become the best trader you can be.
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