Getting out of your trades in an ordered way

Getting out of your trades

When you have entered a trade, your main goal is to stay in the trade as long as it is profitable, and to get out of it as soon as you will start losing money. Sounds really simple? Unfortunately it is not. Not only does this involve predicting the future, it also involves dealing with your fears, fear of exiting to late, fear of losing money, fear of doing wrong, ... The best way to deal with your fears is to have a strategy, and to follow it.

You can predefine a number of exit strategies you need to think of

	Exiting the trade if you lose too much money
	Exiting the trade if you risk losing too much of your profit
	Exiting the trade if your money just sits there doing no good
	Exiting the trade when you have established a predefined target
	Exiting the trade when the trading pattern tells you that there will be an unprofitable time ahead in this stock
	Deciding to exit only on close value after end of day, or also exiting on events during the day

Decide on your strategies and write down your actions in certain scenarios

If you will not look into the market until after the closing of the day, well that is fine and you do not need to predefine your strategy. You only need to decide what order to place for the next day (for example selling if you get a certain amount of money). But if you are going to look at the market, you need to have written down how you will behave in certain circumstances, because the market will have you jumping, sweating, betting, forgetting, ... Thus, you need to know that if the stock is above a certain value, that is fine, you do not care until it reaches all the way to... You also need to know what to do if it goes below a certain price. Will you ignore it? Or act if you are in the last hour of the day? Or if the volume is high? Or if the buyers are fading away? Or if ...

Prepare yourself, create trust for your strategy, figure out the odds in advance

Do not try to decide all your actions and triggers when you are sitting there looking at the prices. You need to know the odds, you need to know your plan, and you need some solid feeling of trust to lean on when the trading starts to move, either it is for you or against you. In order to trust that you know what you are doing, you need to test the strategy that you are following.