The setup and the execution:
- Buy at $26.00 (October 4th)
- Stop at $23.00
- Exit target $29.00
- Profit target $3.00 (October 18th)
Result = 11.5% gains in 14 days or 0.82% per day
I still check the daily ROI as my goal is still to hit 1% per day overall. If I wanted to spin the numbers a bit I could use trading days and count this as 1.15%... but calendar days are easier overall.
I watched at the open of market as the price brushed $28.93 and thought that I should cancel my limit order and look at changing it to a following stop once the price passes $29.00, perhaps just set it at $29 to start or see where it goes and set a VTSO for 25 cents or so. While I could have captured more, it did hit the $29.70's, I got busy and didn't look at it until after my limit order had executed.
Now the price is back below $29.00 anyway.
I would rather not have to feel like I need to watch the charts during the day to try to capture these sorts of moves so sticking to my rules and therefore the limits is the plan.
I would have considered leaving exit orders off of some trades in future and leaving winners run but the history on the trades indicates that I am still better in the long run to cut at my initial target. In some cases even lowering my target is prudent depending upon the price activity during the course of the trade.
It all boils down to both trading within the plan, obviously, but also not fighting against a tried and successful plan. This amounts to the tweaking that I am prone to perform once I get to the tried and tested stage which, as often as not, turns a plan with a definite edge into a marginal nightmare to manage.
Over complication does not make for a better trading system.
Over complication is just another side effect of greed.
Jeff.
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