Exits

I suck at letting profits run.  If left to my own devices, I will cut my own throat with winners every time.  I will begin by lightening super early at arbitrary prices, then will continue lightening as it works some more, and then I'm left with a core position which seems so puny, that I decide to just exit because I wont make any money on it even if it works.  Of course that last exit is usually too early and although the position was small, staying in would still have made me more money.

The way to fix this mookish tendency that I had come up with is to stick to the script and go for a get out all at a predefined target based on the setup.  The problem is, its hard enough to follow when I have a setup, so when I don't have a specific, predefined plan yet still find myself in a position, I quickly resort to the only way I know how to exit, which I have already said sucks a big ball.

So, I have a new plan.  If I have a predetermined plan, I will stick to it.  If I don't, I won't allow myself to set arbitrary limits to exit.  Instead, I will say to myself, how much do I like this trade?  If I love it, I wont lighten or exit until I get an extreme tick reading of 1000 plus.  If I only like it somewhat I can wait for 800.  If I hate it, i will wait for 500.  I guess if i am super amped about it I could wait for 1200 or 1300.  But I usually hate a play as soon as I'm in it, so at the very least I will attempt to get 500, which are better, wholesale prices for my exits.  This only applies to profits.  If I am negative in the trade I have to respect my stop and not be tempted to wait for wholesale price at the risk of getting a horrendous move against me first, and hold through it.


I will try to stick to this new plan and reassess later.

-fmlt