When is a good time to exit a stock position?

[kls06541]

I'm looking for a method or a formula to know when to exit a stock position .

I know when to enter a position but I don't have a proper method to know when to go out, when to take profit and when I should put in a stop loss.

Does someone have a a good method how to manage the take profit and the stop losses?

 

[mashume]

If you're uncertain you can use trail stops and take it out of your hands.
Trail stops will not make you much on tight stops, but it's better than losing big.

The general rule it to exit while the position is still profitable. Many an account have gone down looking for bigger and failing.

I like to trade sometime with set targets and stops when I want to worry less or am really busy with the day job.

The process looks like this:
1. ToS alert to enter position triggers
2. enter position
3. set stops and targets -- two separate OCO orders, close half at each of two targets, stop loss the same for both halves.
4. go make coffee and check back next time the alert happens.

This doesn't look for the big move of the day. It relies on good signals and capturing small but solid moves. I generally sell half at my first target and the second half at the second target.

just be sure you're having fun trading. This isn't supposed to make life bad.

-mashume

 

[kls06541]

Thanks for your quickly reply

This is my issue, I don't know what my take profit order should be, $0.05 $2

I just need some guidance and some method how other people advance users are doing it

 

[mashume]

I put a stop at say $100 on a futures contract and targets of 200 and 400 for my trade. It's what risk:reward you're comfortable with and then what your maximum loss (pain) will be for any given trade. Best advice is to never risk more than 1% of your account on a single trade. So if your balance is 5k, your max loss on a trade should be $50. Work it from there. If you want a minimum R:R of 1:2, then you risk 50 to possibly earn 100. Don't go for the 1:1 R:R, it requires your win rate to always remain above 50%. That's tough.

-mashume