Exit strategy

[dreamgirl]

My stop losses are set for decreases in the share price. I would like to know what methods can one use to define an exit strategy when the share price is increasing?

[Captain_Kidd]

DG I think determine how much you are prepared to lose if the share is not profitable yet, or determine how much profit you are prepared to lose if you are into green, and then set your stops to exit there. It all depends on the risk you are prepared to take. I think to stop your self from exiting everytime there is a small correction, dont set the stop to close behind the price, this can be determined by using your moving averages to see at what stage does the share breach the MA try 40day, 50day, 55day, etc.. till you find one that you are comfortable with, then set the stops to trail at that distance behind the share. Only My opinion, Im no expert, Maybe someone else also has a good view??

[#3]

I agree. Seems a trailing stop is what youre looking for.

[barry_1]

U can also put fixed stop losses above the share price at various levels,i find this a good stratergy with warrants as it stops greediness of wanting to achieve the highest price before selling.What usually happens in warrants is that there is a sudden reversal and then one scrambles to get out hardly making a profit at all!

[#5]

Problem with warrants is that the price can fall past your stop if no trades go through. Its a full time job, and IMO not very profitable.

[Tango]

Dreamgirl - it depends on what your time-frame is - for some people, a couple of red days in a row is no problem and they will ride the larger trend for as long as they can. For other people they will exit on the first sign of weakness. You can also use mechanical trailing stops like a fixed percentage or something like Elder's Safe-stop or chandelier stop formulas. Most reliable in my opinion is the simple dow-theory style stops - look at a daily or an hourly chart, and as long as the highs are higher, and the lows are also higher stay in. Keep moving your stop up to a break of the most recent significant low.

[SimonPB]

dreamgirl, the bad news is that selling at profit is the hardest part of trading/investing. You can use lower lows on the end of day share price, stop loss at increasingly fixed price, or a trailing (careful with too tight trailing). You can just use the bi annual EPS if holding long term, MA cross over's. In short anything - no one answer, try different and see what works best for your style.