How to exit a successful trade!

[beginner_av]

then what if tomorrow, market crashes at 9:55 am.. how are we going to save our capital..?

simple

1. day trade
2. buy puts
3. dont trade

 

[fast_rizwaan]

simple

1. day trade
2. buy puts
3. dont trade

day trade is ok. i'm asking about delivery based trade where we ride a trend.

buying puts after buying equity would be hedging and puts are more investment.

 

[beginner_av]

take the pain
as a part of the gain!

 

[fast_rizwaan]

take the pain
as a part of the gain!

do you mean delivery based trading can't be protected?

 

[the tape]

do you mean delivery based trading can't be protected?

Hi fast_rizwaan !

One of the troubles with trading positional is gaps. these can be 2 to 3 times our stop loss therefore there is a significant risk of capital loss. But, one thing you can try is take an intraday position of the stock based on your analysis in morning if you are looking for a long and let the price close well above your buying price. this would definitely require skill as you need to spot an intraday winner in the same stock that you are willing to go positional long in.

This way even if the market gaps down next morning, you will not face a big loss.

This is how i personally trade nifty positional, whenever i do

 

[biyasc]

from last few months i am using the following exit method. at first i try to find out b/o levels on 5-minute stock charts. after breakout, immediatwly i enter by using limit buy orders & quickly place a sl sell order at defined sl level.

After entry on 5-minute B/O bar, if price hit my stop loss sell order within 5-minutes, i will be stopped out. If stop loss survives, then i sell partly at market price after every 5 minutes of the breakout.

Ex. bought 50 shares on breakout @11.45. If stop loss survives, sell 25 shares at market price @11.50 & hold balance 25 shares with same stop loss. If stop loss survives, sell 13 shares at market price @11.55 & hold balance 12 shares with same stop loss. If stop loss survives, sell 6 shares at market price @12.00 & hold balance 6 shares with same stop loss. Continue the process until you are stopped out or sold all shares.

with this exit method i book quick profits for 50% positions. now if price hits my sl order, my loss gets smaller. but if it continues its upmove, then i am always ready to sell partly on every 5 minutes interval.

this strategy helps me to minimize losses & maximize profits on each trade. it is going good for me, but that does not mean that everyone will get benefited from this exit method.

the theme of this method is, enter on a pre defined b/o level & exit randomly on every 5-mnt interval (if you are using 5-mnt charts).

 

[vvvv]

from last few months i am using the following exit method. at first i try to find out b/o levels on 5-minute stock charts. after breakout, immediatwly i enter by using limit buy orders & quickly place a sl sell order at defined sl level.

After entry on 5-minute B/O bar, if price hit my stop loss sell order within 5-minutes, i will be stopped out. If stop loss survives, then i sell partly at market price after every 5 minutes of the breakout.

Ex. bought 50 shares on breakout @11.45. If stop loss survives, sell 25 shares at market price @11.50 & hold balance 25 shares with same stop loss. If stop loss survives, sell 13 shares at market price @11.55 & hold balance 12 shares with same stop loss. If stop loss survives, sell 6 shares at market price @12.00 & hold balance 6 shares with same stop loss. Continue the process until you are stopped out or sold all shares.

with this exit method i book quick profits for 50% positions. now if price hits my sl order, my loss gets smaller. but if it continues its upmove, then i am always ready to sell partly on every 5 minutes interval.

this strategy helps me to minimize losses & maximize profits on each trade. it is going good for me, but that does not mean that everyone will get benefited from this exit method.

if u exit ur positions in 1/3 rds how will it affect ur profits.will it be more or less.

 

[biyasc]

if u exit ur positions in 1/3 rds how will it affect ur profits.will it be more or less.

actually it depends on the current situation of the market. sometimes exiting 1/3 shows more money, less loss. but sometimes the mentioned method helps me to catch the high price of the day. depends my friend. but i feel comfort with the mentioned method.

yesterday, i bought 50 shares of hdfc on b/o, @1705.xx, placed stop at 1695.xx.

sold 25 shares @1726, sold 13 shares @1721, sold 6 shares @1750, sold 3 shares @1800, sold balance 3 shares @1770.

total profit (25*21)525+(13*16)208+(6*45)270+(3*95)285+(3*65)195=1483.

assume that i exited as per the 1/3 rd method, in that case look at the following detail.

bought 50 shares of hdfc on b/o, @1705.xx, placed stop at 1695.xx.

sold 18 shares @1726, sold 16 shares @1721, sold 16 shares @1750.

total profit (18*21)378+(16*16)256+(16*45)720=1354.

the results are near about same. do you have any suggetions to improve this exit method.

 

[Cactus]

Chataji,

One question please......

Asish (Aca Trader) & u both have written somewhere that for greater profit trade should be run upto 3 pm.

now if u place stop like this how long it will survive.......?

or did u changed ur strategy........?

 

[vvvv]

actually it depends on the current situation of the market. sometimes exiting 1/3 shows more money, less loss. but sometimes the mentioned method helps me to catch the high price of the day. depends my friend. but i feel comfort with the mentioned method.

yesterday, i bought 50 shares of hdfc on b/o, @1705.xx, placed stop at 1695.xx.

sold 25 shares @1726, sold 13 shares @1721, sold 6 shares @1750, sold 3 shares @1800, sold balance 3 shares @1770.

total profit (25*21)525+(13*16)208+(6*45)270+(3*95)285+(3*65)195=1483.

assume that i exited as per the 1/3 rd method, in that case look at the following detail.

bought 50 shares of hdfc on b/o, @1705.xx, placed stop at 1695.xx.

sold 18 shares @1726, sold 16 shares @1721, sold 16 shares @1750.

total profit (18*21)378+(16*16)256+(16*45)720=1354.

the results are near about same. do you have any suggetions to improve this exit method.

i think it depends on ur trading strategy...im goin long trend in an uptrend at the break of the previous pivot high...if trading in RNRL catching a 65 - 75 paisa profit in 1 move is actually doing very well...1st 1/3rd profit taking i actually aim for a 30 - 35 paisa move.next may follow at 60paisa.
if i get a huge mov in the first 1/3 rd itself then i wud exit all my position at my entry if trade reverses.
in scalping i also find the close of a wrb a gud place to capture profits..most of the times ive seen wrb's in rnrl at the breakout of a pivot...
have to replace rnrl with nifty for trading.
i think every stock has its own way of movement .i think sticking to 1 or 2 stocks & nifty fut wud be the best.
as for testing exit strategies its best to develop a system & backtest it which wud require gud programing knowledge,sumthing which i lack.
give ur views also.