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What methods do you use to let your winners run?

  • #21
  • Jan 8, 2014 2:42pm Jan 8, 2014 2:42pm
Quoting Tom_d
I've been trading for quite a few years now but I still struggle with letting my profits run, I have a clear plan before taking a trade and with targets in place, but I still seem to intervene and reduce my gains time and time again, I've looked at adding indicators to signal a change in direction but I still seem to convince myself that closing the trade is the best option. I've even closed portions of the positions to satisfy my need to take some profit but when I look to lock in my trade for break even I seem to believe that i'm better off taking...
Tom.. if you want to hit your target, then, just simply let it hit your target. It's all mental.. you want to hit more target, then get prepared for beyond your target.. if for example it's 50/100/200 pips or on a timeline like a few hours or a day or two etc, whatever it is, just shoot for above that. This way of practice will get you out around your target instead of half or less because your half now is at or around your target.. make it bigger picture. it builds tolerance and more patience to get you out of this rushing thing problem that you seem like to be having.
If you have a sound trading plan as you claiming, then I assume risking wise is included in it already, otherwise that is the first thing you need to take care of in order to stomach the dd at least and in no rush to get out for little or not enough due to extra and unnecessary pressure purposes.

one other thing.. I don't know what tf you mostly work at.. but whatever it is, you can not make a decision about it in the middle of that time frame and no sooner than close of that time frame. for eg, if you work the 4hr.. you get to make decision on it no sooner than 1st 4hr and only once after every 4hr close. At each close you simply take look at the situation according to your plan and then you make one decision of the two.. to either letting it be or exiting out.. and if your decision is to let it be, then you actually let the damn thing to be left along for the next 4hrs. if your in daily.. once a day.. if your in hourly no sooner than 1st hour and each hour after that and so on.. .
It will give you discipline and it just might do you wonders.

I hope it helps.
Passion, Persist, Patience, Protect
  • #22
  • Jan 8, 2014 2:50pm Jan 8, 2014 2:50pm
Hi Tom,

Yep - I hear you. I am nothing but a newbie in this game, but a question for you, is your position size too much?

I am coming round more and more to the excellent advice offered by 60minuteman - a low win rate/but the opportunity of catching the occasional big winner is absolutely the way forward.

As a result, I am following the H4power / Ap3 / Dibs (I am not trying to compare these systems, just the mindset is similar) context of simply going along with the market flow to a certain extent. Don't overthink the entries, but try to find your position swept along (and not away ;-) ) by the big money.

This video is worth a watch - the whole attitude towards the un-importance of the 'single trade' is crucial.

Inserted Video


Best of luck with it!
  • #23
  • Jan 8, 2014 2:59pm Jan 8, 2014 2:59pm
I don't think there is a method that can fix this - It just sounds like greed/fear which is making you anxious you will 'lose' money.

When you see a trade in profit, ask yourself if you can settle for some portion of it (25%, 50%...). You have to ask yourself this and answer the question HONESTLY.

Then, once you understand that you don't need that $xxx profit from the trade, then don't take it. (Maybe try repeating that a few times.)

You will have other trades today, this week, this month...so don't take that one.

Finally, for just one trade, set a low trailing stop at BE or your minimum profit level (for that trade) and let it go. You can always reset your trailing stop any time you want...as long as it's slightly higher than any time you manually set it before (not where it's been pulled up to, for a buy trade). Keep a sheet handy and make note of where you pull it back to so you never set it too low. Do NOT set a limit and do NOT take the trade off manually - otherwise you ruined this whole process.

At some point, the trade will be taken out at a potentially higher (or much higher) level and then you'll have to decide whether it achieved what you were hoping for. It's possible that it may not scratch the itch the way you were hoping it would and it's also possible that you're too sensitive to the greed/fear of not taking the profit and this is just something you'll have to accept or work harder at changing.
  • #24
  • Jan 8, 2014 3:04pm Jan 8, 2014 3:04pm
I use PSAR to trail my stops and it works wonders. I first use the RSI and 200 EMA to determine directional bias and then I use PSAR to enter the trend and also to trail my stop loss. This system takes all of the guess work out and it works fantastically.
  • #25
  • Jan 8, 2014 3:16pm Jan 8, 2014 3:16pm
Quoting Fx3422271
I use PSAR... This system takes all of the guess work out and it works fantastically.
I really don't think it's an issue with a system, as he said...

Quoting Tom_d
I've been trading for quite a few years now but I still struggle with letting my profits run, I have a clear plan before taking a trade and with targets in place, but I still seem to intervene and reduce my gains time and time again, I've looked at adding indicators to signal a change in direction but I still seem to convince myself that closing the trade is the best option.

However, I appreciate the tip as I only used PSAR for a brief period when I first started trading and having just looked at it again, it does seem like it could be a good way to handle exits. Thanks.
  • #26
  • Jan 8, 2014 4:13pm Jan 8, 2014 4:13pm
Thanks for all the further replies, I've got a lot to look at and work on, I hope this thread is helping out others too
  • #27
  • Jan 8, 2014 5:03pm Jan 8, 2014 5:03pm
No problem. I use the 0.06, 0.2 settings and I only enter when the candle is very close to the PSAR dots. This allows the trend to run for a long time especially with the daily charts. The losses are tiny in comparison to the winners and I let the winners run. Sometimes they really run for a long time.
  • #28
  • Edited Jan 9, 2014 7:30am Jan 8, 2014 5:36pm | Edited Jan 9, 2014 7:30am
Scaling out and multiple soldiers like you already do is a must. The next thing to look for are the better trade setups. I guarantee you have a setup that time and time again goes real good and rarely comes back to break even. Use your trade history and go over all of your winning trades on the chart including trades cut short and find the ones that ran good. I guarantee you will see a pattern. These are your long haulers....


Quoting Tom_d
I've been trading for quite a few years now but I still struggle with letting my profits run, I have a clear plan before taking a trade and with targets in place, but I still seem to intervene and reduce my gains time and time again, I've looked at adding indicators to signal a change in direction but I still seem to convince myself that closing the trade is the best option. I've even closed portions of the positions to satisfy my need to take some profit but when I look to lock in my trade for break even I seem to believe that i'm better off taking...
SPC * Swollen PocketZ Crew!
  • #29
  • Jan 9, 2014 3:16am Jan 9, 2014 3:16am
check out this video. should help you.
Inserted Video
  • #30
  • Jan 9, 2014 5:15am Jan 9, 2014 5:15am
Fractional profit taking and BE stops,
  • #31
  • Jan 10, 2014 2:30am Jan 10, 2014 2:30am
Quoting JoeNY
Scaling out and multiple soldiers like you already do is a must. The next thing to look for are the better trade setups. I guarantee you have a setup that time and time again goes real good and rarely comes back to break even. Use your trade history and go over all of your winning trades on the chart including trades cut short and find the ones that ran good. I guarantee you will see a pattern. These are your long haulers.... {quote}
Analyzing you previous trades is a good method to improve trading strategy. I also try to open two similar orders on the different brokers to see the difference and choose best.
  • #32
  • Jan 10, 2014 2:34am Jan 10, 2014 2:34am
Also, a classic technique is to take out 50% at 1:1, then let the rest run with whatever trailing stop method you choose, considering it as a "free trade", which takes off a lot of the mental strain.
  • #33
  • Jan 10, 2014 3:34am Jan 10, 2014 3:34am
turn your computer off and leave your trading place and go do something else.
  • #34
  • Jan 10, 2014 3:36am Jan 10, 2014 3:36am
The guts, patience and prudence method.
  • #35
  • Jan 10, 2014 3:38am Jan 10, 2014 3:38am
Quoting alt11
Also, a classic technique is to take out 50% at 1:1, then let the rest run with whatever trailing stop method you choose, considering it as a "free trade", which takes off a lot of the mental strain.
classic, but crap also.... the only reason to do this is fear, fear never makes good decisions in trading.

If you're going to hold, hold, nothing feels worse than risking 100 pips for 500 and then only getting half of them because you got afraid at the first hurdle.

Too many traders think in terms of single victories, 'ooh my entry has gone 50 pips towards my 200 pip target, that's a victory, lets secure a victory'.... broken thinking, your one sole aim is profits, nothing else, bigger the better, if you need to lose 10 straight to get 1000 pips profit, then do it.
tradewith60
  • #36
  • Jan 10, 2014 3:47am Jan 10, 2014 3:47am
Quoting Tom_d
I've been trading for quite a few years now but I still struggle with letting my profits run, I have a clear plan before taking a trade and with targets in place, but I still seem to intervene and reduce my gains time and time again, I've looked at adding indicators to signal a change in direction but I still seem to convince myself that closing the trade is the best option. I've even closed portions of the positions to satisfy my need to take some profit but when I look to lock in my trade for break even I seem to believe that i'm better off taking...
All of these answers are great, really good but what if u don't have the Discipline to follow these rules ?, what if u don't have the confidence in the system that u use ?, what you are experiencing is fear, the fear of losing what u already have ( Some pips ), what u are asking for is to be greedy ( To gain some more pips ), everybody knows that these are normal trading emotions which u are entitled to feel like everybody else.

The answer to your problem is self control and only self control, this doesn't come easy, u need to practice this day in and day out until u feel that your are in control and not your emotions, then comes the confidence in your system, if you back and forward tested your system or strategy extensively then its much easy to control yourself knowing that your system will come out a winner in the Long term, if and only if your have the discipline to follow your rules and only then and with time and experience these emotions will become marginal and only then u will sleep well @ night having confidence in your system and rules.

P.S. one of the utmost important rules in any trading system is position sizing, always choose a PS that make you sleep comfortably @ night and take it easy, accumulating wealth is a marathon not a sprint and its been achieved by sitting on your hands most of the time.

Hope it helps.

Regards,
B.R.
Master Your Setup, Master Your self. (NQoos)
  • #37
  • Jan 10, 2014 5:00am Jan 10, 2014 5:00am
Hi Tom, thanks for asking this question. Some of the answers above have been useful to me.....
Also this guy has my vote on what the main problems are.

So here is my 2¢ that may help.....
Last year I had my first profitable year, trading small. Like you I sat some days or weeks with under-water positions that eventually came back to target. So you and I had something that made us sit out that losing position until it became a winner. What was it? belief in your analysis ...IMHO

Certainly in my case I found myself looking at positions and asking "am I wrong?" Well a couple of times it was of course 'yes'.
So one must apply the same mentality to the winning trades, believe in your analysis and wait for your targets.

What did you learn from your under-water positions? Well I learnt to assess my entries more carefully.
After all when you are sitting 500 pips down there must have been a mistake somewhere, right?

So now I am into the next psychological minefield, I just pushed my trade sizes up, and a bigger account balance to match of course.
This year's challenge is to keep my head now that the numbers are bigger.
Good Trading.
Carbon-Dioxide: the gas of life! https://youtu.be/ttJBdr6eBuo
  • #38
  • Jan 10, 2014 6:41am Jan 10, 2014 6:41am
Quoting Tom_d
I've been trading for quite a few years now but I still struggle with letting my profits run, I have a clear plan before taking a trade and with targets in place, but I still seem to intervene and reduce my gains time and time again, I've looked at adding indicators to signal a change in direction but I still seem to convince myself that closing the trade is the best option. I've even closed portions of the positions to satisfy my need to take some profit but when I look to lock in my trade for break even I seem to believe that i'm better off taking...
Hi, it's a big problem, I don't know if you've read or know about this http://prospect-theory.behaviouralfinance.net/ but it might be worth a look.

People often say "oh just sort out your psychology and you'll be fine" which is as useful as "just pull your socks up". Our psychology is really really difficult to fix, not impossible and certainly worth the effort but you may want to try the simpler solutions beforehand.

If it's possible move physically away from the trade. Shut down the PC, go outside, go where you can't do what you know you're going to do. Stupid and simple but it'll give you instant quantifiable results.

Another way might be to study your trade history in depth and see if you actually need to run more trades. I don't know your strategy but you might be creating a problem that you don't need to worry about, you might find that going for smaller targets would give you much more consistency and profit. I know it's a bore but trading is pretty boring.

Anyway all the best, I sympathize.
  • #39
  • Last Post: Jan 19, 2014 3:49am Jan 19, 2014 3:49am
Quoting Tom_d
I've been trading for quite a few years now but I still struggle with letting my profits run, I have a clear plan before taking a trade and with targets in place, but I still seem to intervene and reduce my gains time and time again, I've looked at adding indicators to signal a change in direction but I still seem to convince myself that closing the trade is the best option. I've even closed portions of the positions to satisfy my need to take some profit but when I look to lock in my trade for break even I seem to believe that i'm better off taking...
The market is dynamic, no method will work all the time. I trade the lower time frame (15M, 30M, 1HR), so my method may not suit you. If the pair is rallying, you should be able to feel that it is rallying, then I use a stop 10 pips below the previous 15M green candle and I will exit the first red 15M candle appears. If the market is boring, but the trade is going in my favor, I use the 4HR candle, 10 pips above or below.

However, the strategy I mentioned above is not set in stone, I also look for previous support and resistance level in the 4HR or daily time frame.

If you look at my trade explorer, I closed my GA near the previous high. I closed the GJ near the previous high in the 4HR. I closed the GU due to the declining trend line.

It takes a while to get used to the concept of letting your profits run, but if you practice it diligently, you will get the hang of it.

Cheers,
FxTurtle
Fear prevent possibilities, and so does Greed
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