Over the last few months I have really started to perfect my trading by using tight stops vs. allowing my losers to go to a full stop. My trading was excellent today because I went back to keeping my stops tight and looking for every way to be able to technically, move up my stop. Many will disagree on this but I like to always go in full share size in the beginning and if you do this, you must manage your trade and zero in on a lower time frame to make sure price action continues in the direction of your trade or you need to kill it! I’m a profitable trader every time I manage my trades early on and get them to profitability Vs. allowing them to go to a full stop out. Another revelation is to only take trades in stocks that the price action is slow enough that you can safely get out of a trade without having to take a full stop, this happens a lot on gaping plays where price can be volatile and you should wait for the price action to slow down. I’ve also noticed on my RIMM trade today that price can swing like a pendulum where price moved down quite nicely only to retrace taking out my break even price. Hey, If I’m up one risk unit and price comes all the way back to my break even point, I really don’t want to be in the trade anymore. Take your stop and what for a new play or if your stock sets up again, take a 2nd try. I did this in RIMM but this time I had more shares, a tighter stop, and I started to offer shares out as price moved lower, as before, price moved back up into my break even point and I killed the play, but this time I had some profits which I walked away with Vs. traders in my trading room all took full stop outs. Now if you happen to start your trades with a reduced share size, then you can hang in with your trades with the hopes of adding to your play where appropriate. I’ve just never been good at this and end up going to full share size in the wrong area or never getting to full share size and having to watch the play go with tiny shares.
