One of the most common questions from new traders is "when should I take profits?" There is only one wrong answer... that is to NOT have a plan!
I personally take off 75% of my position at a 3:1 Reward Risk Ratio target. The reason I do this is to give my strategy a mathematical edge when dealing with winners, losers, and in between.
hey, just wanted to tell you thanks for this (and all your videos). your style really works for me in that you are clear, simple, succinct, practical, realistic. appreciate you!
fiasst
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That's great, man! My gut tells me to try leaving 25% on for a 6:1 or 8:1 to realize that gain more often, but I like your thinking! Thanks!
Ultracombobreaker
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I'm very new to this, I used the tool you used and got different results: I placed the starting point on NAKD .5601 cents per share, then I extended the stop loss to 1% which is .0057 and then I increased the profit until the middle box said "Risk/Reward Ratio: 4.11, Closed P&L: .0234, QTY:4385" I have no idea what where the QTY came from, is that how many shares I have to buy to make 4 to 1?
The target profit was .0234 (4.18%) 234, amount: 202.61
According to my calculations if I put in $100 into .5601 I get 178.53 shares, if I were to sell at the 4 to 1 RRR I would only make .0234 cents of profit for $104.17, I'm doing something wrong. If I'm investing $100 and want $300 dollars, wouldn't I need to make 300% of my initial investment, please help me out on this.
The 1% is of your TOTAL CAPITAL. So if you have a $1000 account 1% is $10. You need to find a technical analysis based stop loss point based upon the charts... below prior lows, below MAs, etc. and then fit that movement of the stock into your $10 total capital risk.
The QTY is a function of the tool in Tradingview which you can set in the settings of that drawing tool.
Ultracombobreaker
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@norok, I think where I'm getting it wrong is I'm mixing up a literal 3 dollars for every 1 dollar invest and I think it may simply be a "ratio", would you please do a video explaining how to set up the long position tool for dummies with a 10k maximum fund. I want to see how to set it up, so the tool's not asking me to buy 100 million stocks in order to produce 3 for 1. Please and thank you.