Jack on winning trades, 3

...cont'd from yesterday...

Continuation of discussion about managing a profitable open position based on Schwager on Futures: Technical Analysis.

4. Yes, DO take profits on PART of your position if such profits are both LARGE and QUICK. If in a very short time interval price moves swiftly towards what you estimate to be the maximum for the move (e.g. price reaches a prior pivot high/low), then do take partial profits provided you re-enter on a retracement. That is, if a price move covers more than 50% of your estimate of the maximum move within one week or more than 75% within two weeks, do exit part of your position provided you re-reinstate that partial position when price retraces. This will sometimes result in missing part of a major move in cases where price does not retrace (so that you can re-enter), but this will enable you to avoid nervous liquidation on a sharp retracement.

5. If you take a large quick profit on part of your position, use a trailing stop for the remainder of the position.

...cont'd tomorrow...

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