When to take profit, what do you guys think ?

[andyintenerife2020]

Currently have 2 shorts in the FTSE 100
One has 100 pips, the other 50
I'd planned to take at 100 but I think there is a possibility of it going lower.
What do you guys think?

 

[tomorton]

This is the biggest question in trading. It has no perfect right answer, but that also means you can have a not very good answer and still do well from your winning trades. In practice you can even apply conflicting solutions on consecutive trades and still be profitable.

Most advise that as soon as your profit equals your initial risk (entry to stop-loss), you move the SL to your entry price. Now you cannot lose account capital but you still must answer the initial question.

Remember that at this point it's not simply a question of exiting or holding, you also have the option to exit part of the position: you can also add to the position.

As ever, the TA is your best guide.

 

[timsk]

As ever, the TA is your best guide.

I seem to recall that Andy doesn't 'do' TA, Tom!

Andy, if I'm right about that, you can just use one of the many tools for the job that your broker will offer on their platform. By way of example, the chart below shows two options: a type of moving average (MA - continuous bendy line) and a Chandelier Exit indicator (CE - broken straight lines). It shows the last three hours of price action yesterday on the Dow. I use the MA (not the CE) and, broadly speaking, if I'm long, I'll close my position when a candle closes below the MA and it turns red. Visa versa in a downtrend. You can see a lovely move that would have bagged well over 100 points around 1800 and a good couple of others before the close.

If you want to exit in stages, you could have two MAs, the second of which is less sensitive than the first, so you exit half your position when price breaches the first MA and the other half when it breaches the second MA.

This is a more 'mechanistic' approach and takes the subjectivity out of TA which someone like Tom is an expert at - having practiced it for 20+ years! There are numerous other options which may suit you better - just do a search for 'trade exit techniques' or something similar.
Hope that helps.
Tim.

 

[tomorton]

Cheers for this Tim. I'm still wrestling with exits.

The most "mechanistic" trader I have seen "The Transparent Trader" on Youtube. He meticulously tests TA strategies. Each time he has to test a range of exit tactics. He often finds a great exit tactic for one fstrategy will not work with another. He has no more clue why this is so than anyone else does.

 

[andyintenerife2020]

What's TA?
I think I need a course on how to use platforms.
If anyone needs proof you don't need to be intelligent to make money, it would seem I'm the perfect example
MA, I just turned that on, it has 3 on some products and 4 on others
20, 50, 100 & 200
Which should I try/use with your method?
Also can I ask
Is 20 ma on a 1 minute chart 20 minutes and on an hour chart 20 hours ?
Or is it not that straight forward?

Happy to show my live accounts, CFD and spread

 

[ThaddeusFinch]

Currently have 2 shorts in the FTSE 100
One has 100 pips, the other 50
I'd planned to take at 100 but I think there is a possibility of it going lower.
What do you guyI

I think you always must make decisions based on your risk tolerance and trading strategy, and consult with financial professionals or trusted trading communities for additional insights.

 

[andyintenerife2020]

I definitely don't understand this, my account is a little over £8000 I accept I'm risking at least 50% every day, I don't do stop losses so risk to reward ratio is non existent.
Trusted trading communities= what is this ? I read 80% of people lose money so definitely interested in what a "trusted community" is.
Consult financial professionals = haha
The professionals state that only 28% of the time do economists get it right, hmm 🤔 you think it's good to listen to people who make money from the public? Please educate me otherwise.

 

[timsk]

What's TA?

Hi Andy,
I assume this is sarcasm but, just in case, TA is Technical Analysis, i.e. the study of price charts with (or without) indicators and other tools in order to make trading decisions.

I think I need a course on how to use platforms.
If anyone needs proof you don't need to be intelligent to make money, it would seem I'm the perfect example
MA, I just turned that on, it has 3 on some products and 4 on others
20, 50, 100 & 200
Which should I try/use with your method?

I can't really help with this as I don't know what market(s)/instrument(s) you trade, your style of trading or your objectives. In other words, the techniques used for day trading may differ to those employed for position trading. Similarly, the objectives of the former may - for example - be to trade a reversal to the mean (which you've indicated on another thread), while the latter may be to ride the trend until 'the bend at the end'.

Of the four MAs, the 20 and 50 will best approximate what I was trying to show in the Dow chart, the other two indicate the long(er) term trend and are commonly used on daily charts. You can play around with the settings - they almost certainly won't be fixed - to see what works best for you.

Also can I ask
Is 20 ma on a 1 minute chart 20 minutes and on an hour chart 20 hours ?

Pretty much - yes. The 20 relates to the number of candles/ bars on the chart. So, if you're looking at a 1 minute chart then, as you rightly say, it's an average of the last 20 candles/ bars, i.e. the last 20 minutes. However, if you're looking at a non-time based chart (like my Range chart of the Dow), then it's still the last 20 candles/ bars on the chart that are being used to calculated the MA, but there's no indication of time.

Or is it not that straight forward?
Happy to show my live accounts, CFD and spread

If you want more feedback on this, I suggest the way forward wold be for you to post a chart of the FTSE and indicate where and why you entered. That will provide the necessary context for subscribers to your thread to suggest ways you might exit.
Tim.

 

[timsk]

. . . Please educate me otherwise.

You're spot on Andy.
When it comes to public forums like T2W that are free to join, there's no such thing as a 'Trusted Trading Community'! Take everything anyone says with a pinch of salt - especially me!

 

[andyintenerife2020]

Basically my strategy is to take a sell position anywhere above 7550 and hold it, during the past 6 weeks I have taken around 20 sell positions.
I have one buy position as a hedge because I don't use stop losses, I have sufficient funds in my account for all positions to go to 8050 and no margin call.
also I have taken 3 scalping buy positions during that 6 weeks.
The question about TA wasn't sarcasm, I genuinely didn't know.

 

[tomorton]

Hi Andy,
I assume this is sarcasm but, just in case, TA is Technical Analysis, i.e. the study of price charts with (or without) indicators and other tools in order to make trading decisions.

I can't really help with this as I don't know what market(s)/instrument(s) you trade, your style of trading or your objectives. In other words, the techniques used for day trading may differ to those employed for position trading. Similarly, the objectives of the former may - for example - be to trade a reversal to the mean (which you've indicated on another thread), while the latter may be to ride the trend until 'the bend at the end'.

Of the four MAs, the 20 and 50 will best approximate what I was trying to show in the Dow chart, the other two indicate the long(er) term trend and are commonly used on daily charts. You can play around with the settings - they almost certainly won't be fixed - to see what works best for you.

Pretty much - yes. The 20 relates to the number of candles/ bars on the chart. So, if you're looking at a 1 minute chart then, as you rightly say, it's an average of the last 20 candles/ bars, i.e. the last 20 minutes. However, if you're looking at a non-time based chart (like my Range chart of the Dow), then it's still the last 20 candles/ bars on the chart that are being used to calculated the MA, but there's no indication of time.

If you want more feedback on this, I suggest the way forward wold be for you to post a chart of the FTSE and indicate where and why you entered. That will provide the necessary context for subscribers to your thread to suggest ways you might exit.
Tim.

This is all good stuff Tim, many thanks.

We certainly need more commentary from Andy to understand what he's doing and why.

Andy - Please do reply as Tim asks. Right now I am just suspecting that you favour being short on the FTSE100 because your chart starts at the bottom left of your computer screen and ends at the top right......

 

[andyintenerife2020]

I have invested in shares and gold (physically and virtual with the mint) for 38 years and I've done ok, I have traded a little in the past but as soon as I increased my stake I lost and the tiny stakes weren't worth my time (I thought that then, now I know different)
Now I'm trading because my son needs something for the future (he cannot keep a job) I have the time to commit because I'm retired.
I like the FTSE 100 because it's familiar.
At the moment I have several short positions and one long "hedge"
I also scalp a little using my current positions as a safety net, I don't use stop losses and never have. I ensure I have sufficient funds in my account to cover any potential negative position.
I also scalp gold, between 20 minutes and 2 days and I have 2 stocks which are position trades, however I've also scalped on both.
I have a short on usd/jpy some things I hold as futures depends on the timescale I think I'll hold them. I use two accounts, spread bet and CFD, my CFD is at 82% win rate and my sp at 100%
My sp is tiny amounts, my CFD "FTSE" is bigger stakes.
I don't use charts, but I've started to look and yes I have a short on FTSE because the line goes from bottom left to top right 😂

In my head, historically the 100 has only been over 8k a few times so that's like a stop loss to me, i think if I take a sell above 7550 and wait
I got in at 7540, 7598, 7633, 7694, 7703 I took a couple around 7700

 

[andyintenerife2020]

Is that sufficient?
Or do you need to know anything else?

 

[andyintenerife2020]

 

[andyintenerife2020]

It's not a lot of money but I'm new to this type of trading, 15-20 years ago I tried but my gains were 2$ maybe 8$ per trade

 

[tomorton]

I have invested in shares and gold (physically and virtual with the mint) for 38 years and I've done ok, I have traded a little in the past but as soon as I increased my stake I lost and the tiny stakes weren't worth my time (I thought that then, now I know different)
Now I'm trading because my son needs something for the future (he cannot keep a job) I have the time to commit because I'm retired.
I like the FTSE 100 because it's familiar.
At the moment I have several short positions and one long "hedge"
I also scalp a little using my current positions as a safety net, I don't use stop losses and never have. I ensure I have sufficient funds in my account to cover any potential negative position.
I also scalp gold, between 20 minutes and 2 days and I have 2 stocks which are position trades, however I've also scalped on both.
I have a short on usd/jpy some things I hold as futures depends on the timescale I think I'll hold them. I use two accounts, spread bet and CFD, my CFD is at 82% win rate and my sp at 100%
My sp is tiny amounts, my CFD "FTSE" is bigger stakes.
I don't use charts, but I've started to look and yes I have a short on FTSE because the line goes from bottom left to top right 😂

In my head, historically the 100 has only been over 8k a few times so that's like a stop loss to me, i think if I take a sell above 7550 and wait
I got in at 7540, 7598, 7633, 7694, 7703 I took a couple around 7700

It's an intriguing spread of approaches Andy. Actually with sufficient account capital plus no regulatory constraints on hedging it's not essential to set a stop-loss. The approach even in principle allows a profit based on a totally blind random entry point.

In principle it's totally rational and an effective use of resources to be scalping on short time-frames while holding much longer-term positions.

Actually, it sounds like your trading replicates what large banks and funds are doing, so it's hard to say that would be wrong.

Making a profit means you're winning the game. Best wishes.

 

[timsk]

It's not a lot of money but I'm new to this type of trading, 15-20 years ago I tried but my gains were 2$ maybe 8$ per trade

Hi Andy,
I have some bad news for you which, probably, will be a bitter pill to swallow - but I assure you that I mean well and have your best interests at heart.

Perhaps Tom will disagree and think I'm being harsh, but it looks to me as if you don't have a robust and thoroughly tested trading plan and that your strategy is simply to short the FTSE when it looks expensive, overbought or at 'resistance' (to use a TA term) and then hope that it falls back down which, so far, it has. But, going forward, that's not a a sustainable plan as, sooner or later, the index will either push higher or tank lower. I'm afraid your gains thus far are more a consequence of good luck than they are of good judgement. If you enjoy it and are only trading with funds you can afford to lose - then by all means carry on as you are - I'm not trying to be a party pooper!. However, if you want something that's going to either generate consistent profits over time for your son - or something that you can teach him - then I think you need to go back to the drawing board. If - as you've indicated - TA is not a rabbit hole you're keen to go down, then you need to explore fundamental analysis in depth and use that as a basis for your trading decisions. Keep in mind though, this is not normally regarded as a good tool for short term trades, i.e. what you refer to as your 'scalp' trades.

If you don't currently have a trading plan and want to create one - the second and third links in my signature might be a useful starting point.
Tim.

 

[andyintenerife2020]

That's good, I'd rather someone pick fault with my plan.
How do I see your 2nd & 3rd links in your signature?
I tapped on your name and couldn't see anything about links or signature

 

[timsk]

That's good, I'd rather someone pick fault with my plan.

Hi Andy,
Excellent - I'm glad you didn't take offense!

How do I see your 2nd & 3rd links in your signature?
I tapped on your name and couldn't see anything about links or signature

The links are in my signature which appear in all my posts in blue beneath the main body of the text. Just hover your cursor over them, (whereupon they'll change colour and a line will appear under them), then just click on them and a new page with the relevant info' will open up in your browser.

As an aside, I was reminded of a trader called Nick Shawn who has a big trading YouTube channel and who, broadly speaking, trades the same way as you outline. That is to say the rationale behind his trades is similar to yours. He claims great success just using support and resistance (which are easy concepts to learn), combined with tight risk and money management. The bit that will appeal to you most about his approach is that he hardly uses any TA at all! Now, please note that I can't vouch for him, I don't know him, I don't subscribe to any of his services and don't follow his Telegram channel - so he could be well dodgy for all I know! That said, his ideas are simple (which is good), easy to understand and, as far as I can tell, pretty sound. So, take a gander and decide for yourself. Enjoy!
Tim.

 

[tomorton]

Hi Andy,
I have some bad news for you which, probably, will be a bitter pill to swallow - but I assure you that I mean well and have your best interests at heart.

Perhaps Tom will disagree and think I'm being harsh, but it looks to me as if you don't have a robust and thoroughly tested trading plan and that your strategy is simply to short the FTSE when it looks expensive, overbought or at 'resistance' (to use a TA term) and then hope that it falls back down which, so far, it has. But, going forward, that's not a a sustainable plan as, sooner or later, the index will either push higher or tank lower. I'm afraid your gains thus far are more a consequence of good luck than they are of good judgement. If you enjoy it and are only trading with funds you can afford to lose - then by all means carry on as you are - I'm not trying to be a party pooper!. However, if you want something that's going to either generate consistent profits over time for your son - or something that you can teach him - then I think you need to go back to the drawing board. If - as you've indicated - TA is not a rabbit hole you're keen to go down, then you need to explore fundamental analysis in depth and use that as a basis for your trading decisions. Keep in mind though, this is not normally regarded as a good tool for short term trades, i.e. what you refer to as your 'scalp' trades.

If you don't currently have a trading plan and want to create one - the second and third links in my signature might be a useful starting point.
Tim.

Tim, I'm prepared to hope that Andy's using special individual circumstances to avoid the inevitable -
ability to hedge
willingness to hedge
refusal to exit losing trades
deep reserves of capital
patience
nerve
underlying financial security

Everyone else who sells because price is higher and buys because price is lower is indeed going to crash and burn.