k1 Project – Basic Tactics – Taking Profits

Sure wish there was something clever to say here, but I’ve got nothing. It seems like a no-brainer to take profits on a double and cut your losses to 20%, but that’s where our hope and greed get in the way of our own success. The tactics discussed here are simple, the strategy is clear, but the discipline is hard and takes practice.

Eventually I’ll have the "Find your trading self" section up and can point you that way for more reading on understanding what works for your mindset and how to be more successful.

No Reading List this time, just a few Quotes

• Losing Less is the same as Making More – Link
• Optrader often says how important it is to be able to take a 20% loss and it’s a lot easier to do if you also learn how to take a 100% gain as it erases 5 of those losses. – Link
• With mattress plays, once I make .50 I will ruthlessly defend .25 so if you want a simple answer, I keep a .25 trailing stop on a $2ish DIA play (Septembers) and maybe .50 on at $3+ play (the Octobers). – Link
• That’s why we sell callers – they pay for our mistakes! I think the problem most of you have is you think the goal of a taking on a caller is to win. While that is nice, the real reason we take on callers is not to lose! – Link
• When trading you must have set parameters for stop losses and taking profits, please read OptionSage’s book and in Phil’s education section for more info. You can’t just be holding and hoping, take profits or die. – optiondragon
• The fallacy of chasing large profits rather than taking small profits more often is probably the most damaging strategy pursued by traders. – Link
• There are 9,000 other stocks you can buy with your profits but none can be bought with your losses! – Link
• Oh by the way, whenever you enter any kind of spread and make 20% in a month, anything you do from that point on is pure and stupid greed. – Link
• The trick is to get a GOOD deal on a spread and look to get out early. As you increase your virtual portfolio you can make more and more spreads and those 20% gains really start to add up! – Link