I received an email asking me the question below. I posted this in the spirit of learning, I hope the sender would not be offended.
Hi Jonathan,
I need your advice on when should i exit a position to prevent exiting too early or too late? Exit too early then i will miss opportunities on the profits and exit too late then my profits turn into losses.
Thanks & Regards,
And I replied:
Let me then ask you a question: If I am gambling in Resort World Sentosa, when is the exact time I should leave the gambling floor?
Same answers, right? Therefore there is no “correct” answers. It depends on how much control you have over yourself, ie how much greed that you have.
Same answers, right? Therefore there is no “correct” answers. It depends on how much control you have over yourself, ie how much greed that you have.
Have you ever seen a gamblers whereby he has so much profits but in the end, returned everything back to the casino? And then he regrets and kept on scolding himself that he should have left early.
Have you ever seen uncles and aunties always happily leave the casino floor all the time because they have got “small” profits all the time? They don’t dream about striking the jackpot. all they want is $200 to $500 most of the time, they are very happy already.
Therefore, money in the pocket is always the safest.
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I forgot to add, one way is to learn candlestick where the day you want to exit your long position is when you have a confirmation of a short position. Alternatively, set a trailing stop to protect some of your profits and leave the rest on the trading floor.
