I'm trying to do a better job of trimming on the way up...

Closed half my option swings in $MGNI & $RKT on todays pop for +20% in both (on the earlier/more expensive cost basis)

I don't have hard rules on %gain targets on my trades, I usually have soft targets and try to let the market dictate decisions.

That leads to making more "gut" trades than I probably should.

You guy's that trade... How do you set your targets? Any advice for the community? 🙏👇

🦜
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Todd Campbell's avatar
Very tough aspect of portfolio management and I'm not sure there really is a perfect answer. O'Neil was always a 20%+ and take profits person. Weinstein was a let it run until it forms a stage 3 roll to stage 4. There's also the "sell on day 3 spike" crowd. And probably folks all over the map. Depends on 'duration' style, too. Trimming less important for LT buy/hold "Fool" crowd than a swing/position trader and definitely, day trade crowd. For me, I usually trim big spike moves on core holdings or if catalyst passed, sell the move on rentals. I'll often sell some on a gap up (many are being rewarded for sticking w/ earnings gap plays, though). I'll also trim if weight gets too heavy (sleep at night factor). My gut is to trust your gut, but automating is very appealing. What are you 'thinking' in terms of rules you'd consider?
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ParrotStock's avatar
@parrotNovember 1
Author
I appreciate the thorough response. I agree with you, I've done almost "all of the above", and it really depends on the individual trade.

For my long term conviction positions, it's buy & hold, and add too when appropriate.

But for trades, I'm all over the map. I develop a thesis and soft targets going into each trade, but I find myself changing course more often than not.

I haven't decided if that's a good or bad thing yet. One area I don't do well in, is tracking a position AFTER I'm out of the trade to determine if the sell point was a good/bad decision. Something I need to work on incorporating into my tracking.
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Todd Campbell's avatar
The only downside to post-trade tracking is it can screw w/ mindset and it may be that "market bias" influences post-trade action more than individual decision making (i.e. market is up = tailwind, making you look dumb for selling BUT if market had fallen, then would that same decision have been smart?). There are so many variables to account for that I wonder if you can draw accurate conclusions...I think once you've reached a certain experience level, your intuition/gut is one of your most valuable assets as a trader/investor.
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ParrotStock's avatar
@parrotNovember 1
Author
@ebcapital thanks Todd, and I tend to agree.

It’s hard for me sometimes, as an analytical thinker to use “gut” as a reason, although it’s usually the best call. 😊
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