Jumping off a winner

[nodayjob]

I recently got onto the following two stocks in the direction of the trend, but jumped off WAY too early. What happened was that I was basically looking at the Level 2 screen and when I saw a tiny pull back I jumped off.

I'm still new to this and paper trading but here are the two trades which I am still kicking myself over.

NAV
Short @ 51.90
Exited at 51.60 - realised I got off way too early so went short again at 51.20 and my trailing stop triggered at 50.90 (although the execution price was 50.99)
My position size on this was quite large as the risk at the point of entry was deemed to be low so I was kicking myself.

ITMN
Long @ 45.60
Exited at 46.15 - watched it move up to 46.50 at which point it reversed.

I am thinking initially I will keep my stop-loss quite tight, but as soon as it starts moving, then relax it a bit...

I'd like to hear what people use as an effective stop-loss strategy to avoid this from happening.

MODS - I'm not sure if this is in the right sub-forum so could you please move it to the appropriate one if this is the case? Thanks

 

[Waterfield]

What you have to realise that capturing the whole move is very tricky and can be down to luck. Unless you have balls of steel, you probably won't be able to hold on to the trend the whole way. So firstly, cheer up! You picked two great entries (which is arguably half the game!), furthermore you recognised your problem and acted on it. These are two good achievements.

I used to run my stops in fast moving markets, or big moves on what some people call "thrust candles". Big bold candles where the high and low are equal to the open and close. Then I'd just trail on them, this works very well on good momentum, like news releases.

On slower markets I just use pull backs and trail the stop on them until my target is hit or I have a reason to exit.

The key for me is identifying the two, so I get stopped near the lows/highs on V shaped or /\ shaped formations if the move is too quick.

I use 5minute charts so not sure how much these two techniques will help you but I wish you the best of luck in finding something capatible before you go live .

 

[pmccandless]

You absolutely can not justify changing your strategy just because 2 trades didn't go exactly the way you thought. If you notice a common occurence over the period of say 30 trades then maybe you could do a little tweaking, but 2 trades? Means nothing man. If you stuck to your plan on those trades then you should be happy with yourself regardless of the outcome. If you didn't stick to your plan then you should smack yourself and get back on the horse. Just don't be jumpin' the gun with changing things every 2 trades. You won't get anywhere, I promise.