Selling strategies

S

screwrealestate_IHB

New member
<p>Just wanted to see what you guys use as selling strategies for both shorts and longs. I bought SRS and SKF (inverse financial and housing) and at the lowest point in the market last week, was up 25% and 17% pretty quick. I was thinking I was the sh!t and called it perfectly and a few days later and I am down to up 10% on each. My long on Nintendo was also popping huge and was getting a bit heated. It always seems that every time I am thinking "I am the sh!t" with my investments a big correction always happens! Nintendo is heading back up at 72 after dropping from 77 to 66 and I am holding it long but could sure have made some $ by trading it. </p>

<p>So the question is what kind of exit strategy do you use when getting into something, do you modify your strategy after good profit-taking chances, and how would you trade the shorts? I am loooong Nintendo so am not sweating it too much but am a big annoyed at myself for the shorts. I knew financials were quite oversold on bad news but I also do truly believe that things will get much worse. I saw the rebound coming since that is how things go and the market is really trying to stay positive with delusions that we are through with the writedowns. I think that I am going to start using my gut that when I say "I am the man!", it means a correction will happen and so to be realistic. </p>

<p>Sorry for a convoluted question but just wondering how you guys would trade the Inverses...</p>

<p>Hold long and wait till the bottom (2008 maybe 2009?)?</p>

<p>Trade within ranges and watch the news for indicators of the ups and downs?</p>

<p>Set % goal limits?</p>

<p>Thanks!


</p>
 
I always trade with a preset profit target and a stoploss. Actually, I have multiple profit targets to scale out of positions as it moves in my favor. I also like to raise my stoploss to breakeven if I am far enough up that random market volatility will not kick me out of a trade. If you don't have a preset plan for scaling out profits, you run into situations like yours where you actually lose money on what could have (should have) been a profitable position.
 
<p>I am still up so all is not lost but I agree that forethought should be used and I do need to work on it. I traded Boeing a few months back when the 787 was being talked about big time. I knew they were never going to launch on time but there was alot of press. I bought at 99 and said I would like to make it to 105 or so. I bought, it went up to 107 or something like that and I didn't sell, then rode it down until my trailing stop kicked me out for a 1% loss after a few bad days. Everyone and their brother was talking great about them and I trusted the momentum, not my gut.</p>

<p>Do you follow charting software or tech analysis with the bounds and ranges for buy/sell or do you set profit targets based on what you would be satisfied with? </p>

<p> </p>
 
I invest differently than IR and not because his style is better or worse than mine, but because what works for me is probably not what works for IR. Most of my long term investments are based on the same long term fundamental ideas, therefore they have the same exit strategy. But, my trades are usually have different ideas that are specific to the equity or if they are based on the same sector idea, each trade will have different price and technical targets. The most important aspect to any of my short term trades is that I have a specific exit strategy before I enter the trade. And I hold to that strategy, unless the reasons, which I have written down, for that particular trade have changed. Or, I may limit my losses and decide that the losing position is enough of a reason to determine that my original reasons were incorrect. To determine my exit strategy, I must know my reasons for entering the trade. I set % limits on losses, but almost never on winners.
 
Stop loss limits are my best friend, and automatic increasing stop loss limits are becoming a better friend, everyday. I got in on SRS at $80, and I setup my stop loss limits, to sell at $78.50. As it increased, the stop loss would go up by $5 as it went up by $5. Typically, I am not this aggressive, and it would be $2.50 vs. $5, but $5 a day swings are "normal" for SRS. Once it got to $95, I changed the stop loss to sell half at $90, and the rest at $85. Half sold at $90. Once it got above $105, I changed the stop loss to $105. It sold, so I am out. Most people will say "don't you wish you sold it all for $105?". Sure, but that is where greed takes over, and if I kept it, and still used stop losses, between yesterday and today it would have sold for the same $ profit.





Stop loss limits help eliminate some of the emotion. I didn't use to use them, and I still have half my position in PPHM. Mentally, I just can't get rid of it, I keep thinking it will come back. Kinda like housing bulls, reality is, it will just sit there doing nothing.





Be sure to check out the <a href="http://forums.irvinehousingblog.com/discussion/1184/trading-lessons-from-stock-wizards/#Item_1">Market Wizards thread</a>. I posted two books (which I got today, yea!), that you might find insightful.
 
I took too long to get that out. For technicals, I use moving averages, candlestick patterns, and stochastic charts. Learning about moving averages is probably the most important. Candlesticks can tell you a lot, and I can upload a PDF, on what some of them mean. Stochastic is great, but can be wrong, and it shows overbought or oversold. It works better for stocks than it does for ETFs.
 
<p>Graphix:</p>

<p>I still believe in PPHM also. I have faith in their technology. It may not make money but it will save lives. I started at $1.49, .83, .58 and am still accumulating. </p>

<p>srealestate:</p>

<p>Trading is hard, because you have to be right twice, going in and out. If you have the personality for it, you need to be constantly watching it. Every new factor changes the selling limit. </p>

<p>If you think you are good enough, take a week off work, if you can make your regular monthly salary, then take longer time off. Eventually, you will be good enough to do full time. </p>

<p>I find it didn't suit my personality, so I invest for the long term. When you accumulate enough capital the daily swings in your portfolio are a month/ a quarter of your annual salary. </p>

<p>But the least stressful money, was made in real estate from '99 to '03. But we may never see those days again. </p>
 
<em>I still believe in PPHM also. I have faith in their technology. It may not make money but it will save lives.





</em>So do I. And, that is probably one of the reasons why I refuse to sell. I also like that they are a local company. Hopefully they are successful, and their products do become a reality. Regardless of whether I make me money or not.
 
<p>I have a few books as well so I can better understand resistance levels, moving averages, candlesticks, and etc. Just haven't had the time to get into them. Its a balance because I work a full time job and really can't be following the charts all the time. I need to be more of a weekly or long term trader and find a style that is best suited to this. I have gotten lucky so far and have not had any losing trades in quite some time but that doesn't mean anything for my skill level.... </p>

<p>As far as stop losses, I think its also as important to follow up with the stops because of a few times I have used, them, i wish I hadnt. 3 trades in the last 6 months I got stopped out on really bad days, then didn't reenter or went on to something new. I checked up on a few of them recently and would have made a crapload more money had I not been stopped out or had reentered. Example, bought STP at 32, it went up to 40, I got stopped out at 36. Recent prices....67. HXL option bought at 4.60, up to 11.00, stopped out at 8.50, then went back up into the 13s.</p>

<p>Doh!!!!!</p>
 
Graphix:



How do you like the PPHM action today?



Well worth the wait, I am positive now in just one day!



Let's hope it doesn't correct too much tomorrow.



...irvinefsbo
 
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