Daily Tunnel-Take All or Leave Half

Quoting MrMajik

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I have not seen this topic covered elsewhere here. Merlin, if this is a repeat please delete this thread.

Here is a situation that VWB followers run into very often. For this example we are long:

Price is at the lower fib.
Open a new position.
Price makes it to the tunnel.
Our position is currently in profits of $1,000 (1k is used here but it can be any dollar amount)

Here is my question...If we take half off the table we realize a profit of $500. When it gets to the upper fib we will make another $500.

So if we wait and hope for price to make it to the upper fib we end up with a total of $1,500. However, if we take all off the table at the tunnel we profit $1,000.

Leaving half on the table at the tunnel and setting our stop at break even turns a $1,000 gain into a $500 gain if our stop at break even is hit.

Looking back on these currency pairs I see price going to the tunnel area and not making it to the other outer fib for a long time. Sometimes it retreats back to the lower fib (stopped out) before it makes a go for the upper fib again.

Is it better to take all off the table at the tunnel area? Or is it better to risk losing half of the unrealized profits left on the table at the tunnel in the hope that price will run up to the upper fib for an additional 50% in profit? When at the tunnel we either keep 100% of profits or stand to either make an additional 50% or lose 50% of what we had at the tunnel?

Keep in mind that this example assumes we open long at the lower fib and close short at the upper fib. I used round numbers to keep this simple.


from making it to the upper fib is worth the rist of losing 50% of gains left on the table at the tunnel?

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Quoting rongshihong

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I think this is all up to you.

After you take half the position out on the tunnel and realize some profits, it's to your own discretion and personal preference about what to do with the other half of the position.

Some people may close the other half for a quick money. Some will set the stop at BE, hoping for the price to reach the upper level. Some will set the stop loss at somewhere between the lower level and the tunnel so that at least some profits will be retained. Some will trail stops so if the price pulls back they get stopped out but if the price continues to rise, they won't miss the other part.

Use the method that best fits your personal money management style, and try to gain some experience in real trading to see which method works the best. I don't think there is right or wrong answer to this question.

Happy trading.

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Quoting WTB

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I asked this very question to Vegas himself when the VWB document was released, and he said that he leaves half of the position run to the oposite fib band simply because, historically, he's made more money doing so than closing it all altogether at the tunnel.

I guess it's a matter of statistic.

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Quoting smjones

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Hey this does sound a little like the Wind tunnel. does anyone know what thread that was in? I would like to go back and reread it... Thanks Scott

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Quoting eastmaels

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Hi Scott,

It's in the "Lost In the Tunnel" thread by HeavyJ. Here's the link to it:
http://www.forexfactory.com/forexfor...ead.php?t=3422

Haven't gone through all of it but it's good material..
Happy reading!

Regards,
East

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Quoting smjones

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East, Thanks friend. I hope you had a nice weekend. You got to be back at work by now... Scott

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Quoting MrMajik

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Does that sound like a teen-ager thing? How about a 50-year-old teenager?

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Quoting MrMajik

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I have not seen this topic covered elsewhere here. Merlin, if this is a repeat please delete this thread.
Here is a situation that VWB followers run into very often. For this example we are long:
Price is at the lower fib.
Open a new position.
Price makes it to the tunnel.
Our position is currently in profits of $1,000 (1k is used here but it can be any dollar amount)
Here is my question...If we take half off the table we realize a profit of $500. When it gets to the upper fib we will make another $500.
So if we wait and hope for price to make it to the upper fib we end up with a total of $1,500. However, if we take all off the table at the tunnel we profit $1,000.
Leaving half on the table at the tunnel and setting our stop at break even turns a $1,000 gain into a $500 gain if our stop at break even is hit.
Looking back on these currency pairs I see price going to the tunnel area and not making it to the other outer fib for a long time. Sometimes it retreats back to the lower fib (stopped out) before it makes a go for the upper fib again.
Is it better to take all off the table at the tunnel area? Or is it better to risk losing half of the unrealized profits left on the table at the tunnel in the hope that price will run up to the upper fib for an additional 50% in profit? When at the tunnel we either keep 100% of profits or stand to either make an additional 50% or lose 50% of what we had at the tunnel?
Keep in mind that this example assumes we open long at the lower fib and close short at the upper fib. I used round numbers to keep this simple.
from making it to the upper fib is worth the rist of losing 50% of gains left on the table at the tunnel?

Ignored