I exited my most profitable position today, not because I wanted to, but because the system told me to.
I am now left with 7 open positions, with about -$3,700 in open equity:
2 Big losers
3 Little losers
2 Little winners
Not exactly the way I like to see things - I like to keep the winners, and jettison the losers. But, the losers haven't reached their stop points, so there is still a chance (ugly word: "hope") that they will recover.
Remember: my position is always to follow the system, until the system shows that it is no longer viable. So, there are times where I don't like what it is doing, but from experience I know that following the system is best in the long run.
It is times like these that mechanical trading systems became hard to follow. We have heard this too often "Cut your losses and let your profits run". For which, I ask "run until when", forever?
ReplyDeleteTrue, no one tells you the answer. One way is to have a trailing exit. That way, if the trend changes, you will get out before the trade turns too much against you. Some people, though, stay in until a reversal signal hits.
ReplyDeleteLike everything else in trading, there is more than one right way.