Daily Reflection: 05.13

14 May

A very choppy day that provided many intraday setups. To continue our discussion on positioning and trade entry, I would like to stress the importance of NOT chasing moves.
We do this by identifying our entry, stop, and profit target before the trade is even placed. One of the hardest things for a trader to do, which may surprise you, is let his profits run.
A trader is quick to let a stop get hit, but often when a small profit is had, the trader gets nervous and exits the position too early. This can be avoided by having a money management strategy that moves the stop to break even + commissions at say, +2PTS on the /ES, or after a 1 or 2% move in a particular stock. Then you are able to “walk away” from the trade leaving your stop and profit target in place, giving you a free trade if it doesn’t work out.

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