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APN

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BC02
Super Contributor
:) - 143

Skaap, I understand that a person should take profit, no disagreement there and letting things ride indef always leads winners into losers (lesson learned), its just something I picked up from Garth, was too bank half profits and let the rest ride if its still in a strong uptrend.
He then trails it with a a 1 day trailing stop

I quite like that style but as you say to each his own.
Ive noticed it also works well on ALSI futures as well.
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5 REPLIES 5
BC02
Super Contributor
sorry should read take profit "at target"
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Rams
Super Contributor
Or Mark Douglas....take profits in thirds,...with last third at risk free with stop at break-even . 3 contracts on ALSI futures...last contract to capture the full move with stop at break-even and 2 contracts in profit.
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BC02
Super Contributor
when I read this in his book I must admit that section really changed my trading style, it was one of those "lightbulb goes on moments".
I see now why its influenced my results so much - simply because your taking both PROFIT off the table as well as RISK off the table, without necessarily losing out on the last big move.

Your only enemy is greed though, the "but if I was all in I wouldve made so much more..."
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Not applicable
Mark Douglas is misquoted, IMO. He advocated doing that exercise as a technique for removing emotion out of trading. I am not sure though that the technique is likely to yield long term benefit, because now you introduce multiple probabilities into your trading profitability. P1 = stop out at entry. P2 = stop out after 1st profit take. P3 = stopout after 2nd profit take, etc. That is a lot of probabilities to work out to assess if your trading system is profitable or not. Way too complex for me. I take profit when we are overbought, and I am willing to let go of the last bit of the rally - so be it, I am not in it to catch 100% of the move - but then a trailing stoploss will never catch 100% anyways. What I should say though - is that I have a money management system that I call a running trade. Once I have a trade that is outperforming, (like APN), I move the proceeds into a separate 'virtual' trading account, and I allow for re-entries. if I enter on a running trade, then it doesn't count towards my 6% of capital rule.
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Rams
Super Contributor
when the trade is entered, the stop loss is set at same risk level for all three. The profit levels for 2 contracts are also set. When profit taken on second contract, stop loss is moved to breakeven for last contract. Exit is at 17HOO if stoploss is not hit whatever the profit level. Very easy. Very simple...all the work is done on entry, the rest is mechanical.
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