Trouble taking partial profit in ThinkorSwim

Vince Field

Member
Thinkorswim doesn't allow me to scale out (take partial profits) when I have a stop order in place. For example, if 100% of my position has a stop loss set for -1R, it won't let me sell 50% of my position at +1R. It thinks I want to short sell the stock. I have to cancel the stop loss in order to scale out. Is there a way I can sell part of my position with a full stop loss in place?

I was just messing around in the platform and I was able to do what I requested in my initial post. But I was trading earlier today and I wasn't able to do it. It was telling me that I couldn't short sell. I'm not sure what caused the error but I don't recall doing anything differently. Oh well. For anyone curious, you can set the stop loss in active trader by clicking the price in the "ask size" column (below the entrance price), and then chose the sell limit orders by adjusting the share size and clicking the prices you want to scale out at in the same "ask size" column but above the entrance price. You can also choose OCO or trigger w/bracket orders to set all the levels at once.
 

rad14733

Well-known member
VIP
What you have described is standard functionality for Thinkorswim... Are you reporting a problem or just restating known facts...??? Thinkorswim has several ways to enter and exit trades but isn't especially geared towards partial Buys or Sells... We have to work within the constraints of the platform... Truth be told, I have never bought or sold a partial lot - equities by the 100 share lot and options by the contract, both singly or in multiples...
 

Vince Field

Member
@rad14733 When I wrote the initial post I was under the belief that it wasn't possible to scale out with a stop loss in place because the platform had not allowed me to on many occasions and I couldn't figure out why. With further experimenting it seems I am in fact able to do this. I am clueless as to why I wasn't able to do it before. Perhaps I did something differently but I don't know what it could be.
 

rad14733

Well-known member
VIP
@rad14733 When I wrote the initial post I was under the belief that it wasn't possible to scale out with a stop loss in place because the platform had not allowed me to on many occasions and I couldn't figure out why. With further experimenting it seems I am in fact able to do this. I am clueless as to why I wasn't able to do it before. Perhaps I did something differently but I don't know what it could be.
As you have no doubt discovered, you can place multiple stoplosses... I use them sometimes to exit trades of multiple option contracts... I do the same with limit orders for taking profit... Glad to hear that you are getting things sorted... ;) (y)
 

Vince Field

Member
Do you scale in and/or out of trades? If so, please explain your process and the logic behind it.

I'm beginning to rethink my scale out strategy. I've been scaling out 1/3 or 1/2 at 1R, another 1/3 or half at 2R, and letting the rest ride to try for higher profits, but I don't want to sacrifice a larger profit for the comfort of taking some early profit but reducing total profit if it's not worth it in the long run.

I've also been considering starting to scale into riskier trades or anticipatory trades entered before confirmation.
 

msmithou

New member
VIP
I have never heard of anybody going broke by taking an early profit. I go all in at my designated amount (no scaling on entry) with the market trend. On day trades I have preset targets of entering, and then exiting the first 50% and the next 25%. I let the remaining 25% ride until it drops to breakeven or it reaches my last goal where I sell (day trade) or roll it into cheaper options (swing trade).

I use pivot points and moving averages to determine my exits and stop loss. I never enter a trade against the trend or without designated exit points. If the market is moving up, I wait until the trade exceeds my pivot point and the 4 ema. My first signal to exit the first 50% is when the 4 ema and the Ultimate VWAP cross on a 5 minute candle. And I exit the next 25% when the 8 ema touches or crosses the 4 ema on the 15 minute candle. The last 25% is almost a lotto pick. But I have a breakeven exit on the last 25% if the market moves down. This is my simple version or core rules. I will break these rules if I see heavy irregular volume and prices in the "full book" time and sales window.

You are not trading against humans, you are trading against computers. The computers are programed to buy at support levels and sell at resistance levels. So be careful on the final 1/8 or 1/16. It works for me. It took me a long time to get over the "I should have held it longer" syndrome.
 

Vince Field

Member
@msmithou I have a few questions for you if you don't mind.

What would you say your average risk/reward ratio is of your stop loss compared to your first and second target?

Why don't you raise your stop loss to breakeven after reaching your first target rather than the second?

What is the approximate success rate of your strategy?
 

rad14733

Well-known member
VIP
I'm usually all in or all out, with the possible exception of a trade that is on a run at which point I might add shares/contracts... But I rarely ever take partial profits because when it's time to close a trade, it's time to close... That little extra potential profit takes time that I can better spend on finding the next trade... I don't consider scaling in and out to be worthwhile for scalps, day, or short term swing trades...
 

msmithou

New member
VIP
@msmithou I have a few questions for you if you don't mind.

What would you say your average risk/reward ratio is of your stop loss compared to your first and second target?

Why don't you raise your stop loss to breakeven after reaching your first target rather than the second?

What is the approximate success rate of your strategy?
My success rate is over 80% insofar as hitting my first target. So I get stopped out about 10-20% of the time. The second target is my goal. I am not a statistician, so I cannot do a risk reward ratio for you. I absolutely despised statistics in college. Insofar as money goes, I am averaging about 4-6% a week the past few months. I look for singles and doubles. The home runs are few and far between.

Taking money at the first target is what reduces my risk if I do not reach my "true" goal, the second target. Once the stock hits a pivot or moving average, the computers can operate a lot faster than me. I want some profit in my account before the computers get going.

My entry point is the most important variable to make this work. My typical trade gets into an option for .20 to .50 Thus, if the 20 cent option moves to .30 I have made ten cents or 50%; and if it moves to .40, then I make 20 cents or 100%. That is more likely to happen than buying a $10.00 option ITM with goals of achieving a $15.00 and $20.00 move in the correct direction. And it is a lot cheaper.

I must take the emotion out of the trade. To do that, I must have predefined targets and, for the most part, I do not deviate from those targets. I must have a plan. If you do not know where you are getting out, then you do not have a plan. In other words, if you do not know where you are going then any road will get you there. If I deviate from the targets, then I am letting my emotion control my trades. Once that happens, they take my money. Nevertheless, I can see where having a trailing stop loss that moves with the trend could be useful. I think that is worthy of consideration. In fact, a few months ago I looked at some software that was advertised as having a formula for trailing trading stops. There is just a point for me that too much information makes me hesitate. Hesitation brings emotion and my emotion usually ends up giving them my money.

Now, as you can see, I am not making dollars on contracts; I am making pennies on contracts (except for earlier this year). I suspect this type of trading is not sexy enough for most people looking for big scores. That is not me. I am semi-retired with a regular investment account focused on stocks paying a consistent and increasing dividend over long periods of time. I day-trade for fun, not necessarily for money. So I might be buying only 6-12 contracts at a time for 20-50 cents.

It is not magic; and it is really not a system. It requires some work, and the work must be done consistently over time looking at specific stocks in the correct seasonality position, and placing a bet. Then, it becomes fun. I am in this for fun, not money. Maybe that is why it works for me.

I find it highly ironic that I base my trades on taking the emotion out of the trade; yet, I trade for the fun of it, not the money. It is exciting and I enjoy it; so I might as well try to win while I am doing it. Just have a good plan with every trade. It really is that simple. And sometimes you can do everything perfect, and still lose the trade--it happens.
 

Vince Field

Member
@msmithou Thanks for the response! I'm curious about your strategy, as it seems to be quite accurate. If you could share some details about it that would be awesome! What do you look for in the charts that informs you that it's a high probability trade? Do you have any go-to chart patterns or indicators?
 

msmithou

New member
VIP
I started in 1999 with 5 stocks. MSFT BOKF IBM and Gateway Computers. I missed out on Apple. I reviewed everything I could find about these stocks. I looked at their stock patterns everyway possible. I read Investor's Daily before Al Gore invented the internet. I looked at these 5 stocks from the EW peeps, the eels, and every subscription service that I could find. Around 2003-2005 I increased my stock knowledge from 5 to 10 stocks, one of which was Apple. Today, I have about 20 stocks that I trade. I also trade the indexes, oil, and precious metals. I have always looked at the stocks using candle patterns. Over time I noticed that patterns developed, and pivot points appeared (with a piece of paper and calculator).

I stumbled into options by purchasing Panhandle Eastern Pipeline Company calls or it could have been Anadarko Petroleum calls--I do not remember. After I purchased these options, whichever one was the parent company split, and I ended up with both Panhandle Eastern and Anadarko which resulted in me making a lot of money (for back then). That is how I got into options. I immediately lost all that money trading gold options. Gold was selling for about $80 an ounce. I remember when the Dow topped 1,000. I remember when it was 650 and it was a huge story if the DOW moved 3 points. I have been doing this for a very long time.

Seriously, I do not know what to tell you. It is about mastering the stock, not the option. Once you master the stock, the rest falls into place. But I do not look at it as wins or losses, making money or losing money; it is about make logical decisions without emotion. I know that I will miss on a number of wagers; but, emotionally, I accept that risk.

I look at the yearly, monthly, weekly, daily, hourly, fifteen minute, and five minute trends. I pick out 3-5 stocks that I think are moving with the trend, then I place my bet. I take the emotion out of my trades. I understand the game; I am going to lose 2-4 picks out of ten. At times, I do better and other times, not so much. I can live with that without fear or greed.

Here is an example for tomorrow. The strike price for Apple is $119.49 as of 11-11-2021. I will look at the December strike price of 102.5 on the downside and $130.50 on the upside. Both options are about .60 cents. But I will look for something cheaper tomorrow. I will wait at least 15 minutes after the opening bell tomorrow and then I will look at whether I want to buy the puts, some calls or watch the carnage. If I get into one of these options ("with the trend") (bold and underlined"), then I will look to flip half of it when the 4ema, the 8ema, and the UVWAP converge. When the 4, 8,and candle pattern appears, I will get rid of the third quarter. I will ride the last quarter trying to make a logical decision when to get out, typically break even or a 200% ROI, depending on whether the market is at noon or closing. I will do the same with some other stocks. Seriously, I do not know what else to say. That is my plan on every stock option.

I firmly believe that one must master trading stocks before one can even consider trading options. Once the stocks are mastered, then one must be trained to trade options without emotion. Taking the emotion (greed and fear) out of the trades is the hardest thing to accomplish. Once that is done, just go with the trend.

I wish all of you great trading and stay safe.
 

talv1

New member
Hi Vince, i'm having the same issue that you described above, getting the error that I cannot short since I already have my stop in place. I understand that i can buy and then click under the entered price to manually place my stop but what happens if you place a stop on 100 shares, then manually take partial profits on 50 shares, does your stop loss automatically adjust to the remaining shares?
 

Similar threads

Top