taking profits off the table

[dk333]

Just wondering what everyones strategy was for taking profits off the table slowly. Is there some sort of basic formula you follow? so far, I have just set my stop limits and such at AON. I feel that that would be best to secure my profits, especially since right now I am not working with that much money, so commissions could make a dent in my earnings.

[aiki14]

For short term trading I use technical indicators especially volume to tell me when the gettin is good, for long term holds I am watching the fundamentals especially PEG to give me a sign.

[dk333]

For short term trading I use technical indicators especially volume to tell me when the gettin is good, for long term holds I am watching the fundamentals especially PEG to give me a sign.

I was wondering more along the lines of how much you take off at a time in general. Like, 50% and then let the rest ride?

[aiki14]

I was wondering more along the lines of how much you take off at a time in general. Like, 50% and then let the rest ride?

I'll scale out 1/2 or 1/3 at a time if it looks to be running and the position is large enough or I'll just get out 100% and move on.

[wallstreetsedge]

im similiar as well... depending on the size of the move ill typically sell 50, 30, 20, then 10

on modest movements ill sell 15, 15, 30, 10, 10, 10, then 10

[LongArm]

IMO, scaling out is usually more about reducing risk than maximizing profits (not that there's anything wrong with that). But then, it all depends on a bunch of other variables too. Myself, I exit all at once and that works well for me.

[wallstreetsedge]

the risk is losing your profits... which is why you scale out...

dont use stops that are too tight or youll end up getting taken out early by stop hunters

[LongArm]

the risk is losing your profits... which is why you scale out...
And the risk in scaling out is that you'll often leave LARGER profits on the table...which can hurt long-term profitability...which is why one might not want to scale out (assuming one doesn't mind potentially larger drawdowns, etc.).

OTOH, scaling out can increase returns for the RISK TAKEN, which is where the real benefit lies.

[aiki14]

The other advantage to scaling out is that you minimize market moving trades, and it is more likely you'll get executed fully at price. If I have a particularly large position I don't want to exit all at once if I fear it will cause the price to move against the rest of my position.

[wallstreetsedge]

And the risk in scaling out is that you'll often leave LARGER profits on the table...which can hurt long-term profitability...which is why one might not want to scale out (assuming one doesn't mind potentially larger drawdowns, etc.).

OTOH, scaling out can increase returns for the RISK TAKEN, which is where the real benefit lies.


the perk to scaling out is that you get to to play time opposed to playing market direction