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Strategies & Market Trends : DAYTRADING Fundamentals -- Ignore unavailable to you. Want to Upgrade?

To: Judy who wrote (958)	6/18/1999 1:35:00 AM
From: Kevin	Read Replies (2) \| Respond to of 18137

What i don't get is if you are trading a trend why assign a certain % gain to sell after. Why not what for the next sell signal? Kevin

To: Judy who wrote (958)	6/18/1999 3:19:00 AM
From: Richard Estes	Respond to of 18137

The exit point most important is a trade that has turned to a loss. That emergency valve is the one you must have. Letting your profits run, says wait till your system/indicator gives a sale. Lets say you use a MACD with a 0 trigger then let it return to 0. You choose the indicator by deciding what best did the job. But often resistance points are very visible on a short term chart, you could sell at that point if a slow down appears. BTW: the toughest area is from .38 to .63 to get thru.

To: Judy who wrote (958)	6/18/1999 6:31:00 AM
From: Eric P	Respond to of 18137

Judy: I may be missing the point of your question, but I'll give it a try: May I ask for some clarification of the statements "cut your losses and let your profits run" and "have a plan and trade the plan". It seems to me one contradicts the other as to having a clear cut exit point at the time of entering the trade. In my mind, these two statements do not contradict at all. It simply means that: 1) You need a plan for trading. 2) You need to follow your plan. 3) Your plan should incorporate risk control (i.e. stop loss) 4) Your plan should not be too quick to exit profitable trade (i.e. let the profits grow) To further illustrate this, let me propose a highly simplistic trading plan: => Buy long when the stock price rises above the 20 bar moving average. => Exit long if stock moves below entry price - 1.0 (i.e. 1 pt stop loss) => Otherwise, exit long when the stock price falls 0.25 points below the 20 bar moving average. This will keep you in a trade during a long term uptrend, letting profits continue to grow. As you can see, this "trading plan" has a method for "cutting losses" and "letting profits run". Now, if I "follow my plan", I will be following all of these guidelines without contradiction. Perhaps, I may be missing your question. Does this help? -Eric P.S. I don't recommend this "trading plan" what so ever. It is simply posted to illustrate a point.

To: Judy who wrote (958)	6/18/1999 8:34:00 AM
From: TraderAlan	Respond to of 18137

Judy, <some say % - some say points - neither "let your profits run". I know it is contingent to some extent on the time frame for the trade.> Price tends to travel in waves (impulse retest, impulse retest). Traders get in trouble when their time frame is out of synch with the natural cycle of the stock being traded. For example, many day traders try to capture single, direct thrusts of only a few 5-min bars and exit on a price expansion bar away from their entry price. If they wait for even a single dip, their profit is lost. So they're neither relying on a % gain nor letting profits run. For longer "holds", (even longer day trades on intraday charts), you're in a much safer position after allowing a sequence of impulse/retests so congestion above your long position is created and mounted successfully. Alan