Jack on winning trades, 4

...cont'd from yesterday...

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

6. If you have a huge open position relative to your account balance and you have huge open accrued profits on a trade, do scale out of the trade using multiple price targets as price moves favorably. Don’t exit the entire position in one shot; use several exits, while maintaining a trailing stop on the remainder of your position. You won’t know when the move ends until long after you’re out of it.

7. If your trading plan requires re-entry after taking partial profits, carry through with it notwithstanding that your re-entry price is unfavorable compared to your exit price. For example, if you sold at $100 for partial profits and your re-entry requires you to buy back at $120, do carry through with the re-entry. Otherwise, you might miss the remainder of a humongous move.

...cont'd tomorrow...

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