Trade management in the interests of the long haul

[barjon]

For my main equity stuff the ongoing health of my account is predicated on the basis that I achieve at least 1.5:1 return to risk on a continuing basis.

Thus, I will not shoot for less (although my TA based aiming points - or, more properly, zones - vary from that to 3:1 or more) and I will exit at my aiming point without much consideration of whether or not price will keep moving beyond it. I’m all in and all out because I like as much certainty as I can get and prefer to be certain that I’ve made 2:1 (say) rather than the uncertainty that I might only finish up with half that if I exited half and ran half.

It follows that my profitable exits are geared mainly with an eye to what I want to ensure steady growth in my account and not technical considerations of the state of the specific trade at the time, albeit that the aiming points are technical in nature to start with.

I suppose I am guilty of offending the old trade your trade and not your account axiom, but I’m interested in what approach others use.

 

[tomorton]

I'm with you on this jon. While it would be nice to run a trade to a return of 10x risk, when it gets to 5x risk, what financial logic is there in saying 'I'm not satisfied with 5x risk, I want at least 6 to even get out of bed'?

Yes the TA purists will dictate (and claim) to never close a winning trade until the TA tells you it's going to turn round in a big way, but in reality we're in an art, not a strrict science.