This is the very same point I'm at with the system I'm using. I'm absolutely confident in the systems ability to create great entry points but knowing how far to let the profits run is always difficult. I'd suggest doing a statistical study of your own past trades using the system. You're very likely to find some common areas of resistance (or support if shorting) that tend to hold in your unique situation which you can use to take partials/exit. When you know the probability of your winners running to 2R, 3R etc versus the win/loss ratio (obviously this will become smaller as you increase the R value) you can then decide whether you're comfortable letting them run further (if the statistics suggest it's a good idea)

I can get a fairly good idea of a stocks range of movement (as a percentage), based on looking at a chart. For longer term swing trades, I set my targets as a percent from my entry point. I would only take profits if it broke my trailing stop (from some set moving average, not the price) before reaching the profit target.

For day trades, my method is different. I work off of pivot points to find an entry point. I am now familiar enough with the stocks I day trade to know how far the price usually will run from the pivot point. I only day trade stocks that I have watched and have an understanding of their typical behavior.

http://acekingtrader.blogspot.com

http://www.pivotpointcalculator.com

I will say that hte trading volume begins to diminih and the candle sticks begin to shorten and at the top the round shape of hte head is to begin to form it is the time to exit.

Exit strategies are often overlooked. In most systems entries get all the attention, but exits will often determine your profitability.

If you're looking for something mechanical, there are several indicators that work great for stops. SAR is a good one as it tightens up your stop the longer your trade runs. Trailing stops using multiples of ATR is a very popular method. Fibo levels or pivots are powerful exit targets. I will usually exit all or part of a position when price stalls at a trendline or S&R;.

For something discretionary, You'll just have to use the same methods you use for entering. One thing I've used is to ask myself, "Would I enter a trade in the opposite direction?". If yes, I exit my existing position. Scaling out is an excellent way to relieve some of the stress you are experiencing. Most traders I know of who are trading any real volume, scale in and out of their positions. Unless there is a strong reversal signal, it can be wise to let a small portion of your positions run after moving your stop loss to break even or even locking in a profit. On a strong tend day, I've made more profit from that small portion I let run rather than all my scalps combined.

I always go for trailing stops. Anything above that stop can never be mine. I try to trail using short term bounces. In this if my stop is taken away I am happy. But then I will again reenter in same stock or currancy pair if my entry rules allows me.

I always go for trailing stops. Anything above that stop can never be mine. I try to trail using short term bounces. In this if my stop is taken away I am happy. But then I will again reenter in same stock or currancy pair if my entry rules allows me.

Wow, that one must be met with "it depends."

I usually scale out, and have found that except for some longer term position traders, the majority of winning traders also scale out. Every trend has a finite lifespan. If you took all the trends of the day and cut them out and laid them flat atop each other in a chart you would immediately see that they all have something in common. They all exist at the start of the trade, and cease to exist somewhere along the journey to the right of the chart. Inasmuch as you don't know which trend you are riding, the safest time for your money to be in a trade is at entry. A given amount of money earns you just as much profit at entry as it does at the end of a trade, so why add money as the likelihood of a trend reaching its conclusion increases?

You have three alternatives, listed here in order of aggressiveness: scale out; all in/all out; or scale in. New traders should scale in and use two stages. This keeps things simple and has the added benefit of making it easier for them to maintain discipline in the trade. More importantly, it standardizes all their trades so meaningful comparisons can be made in terms of figuring out which set ups are working and when. This review is critical to making it as a trader and is worth sacrificing any incremental potential profit from switching between exits strategies before one has even developed the expertise to decide when to do so. Exit your trades in a willy nilly fashion, and you can throw your journal out the window because the trades are not comparable. You'll never get anywhere by flailing around. Standardization and incremental progress is the key.

As a trader builds up a history of trades, and has fine tuned their line of set ups, he can then sacrifice some of his data by devoting some trades to slowly expanding his repertoire of exits. Again, this must be done in stages, slowly adding different exits and analyzing results. One can stage out in two stages, then try three. The trader may add the ability to cancel the staging out completely and stay all-in throughout the trade. The final and most aggressive technique is to stage in, adding to the trade as the trend progresses. I'm not saying scaling in and ruining your cost basis is always wrong, but it should be reserved for only the most promising of events. If you are in a trade that you are sure you will remember in a year, then maybe it's time to assume this kind of risk, but these events will be rare.

The approach I am describing is an incremental process, very much like the one a trader assumes when he starts out trading one contract and slowly adds another and another until he reaches the point of discomfort. I won't repeat the words of Rangerdoc, who correctly observed that you have to match the process used for exits to the types of trends you are likely to encounter in your particular market. However, you have to learn how to use these methods, and develop the expertise to select the proper method at the proper time. Trying to do so when you are just starting out will retard a trader's development because his results will be all over the map.

Once a trader has these tools under his belt, the proper exit strategy depends on the market. You wouldn't use a moving average in a choppy market would you? Similarly, if I'm long oil and Iran invades its neighbors, you can bet I am going to scale in. Yes, it would be nice if one indicators worked all the time and one money management technique was superior, but trading doesn't work that way. Nine times out of ten scaling out is the way to go, but once you have the skills and the discipline, adapting to clear market conditions, not imagined or hope for conditions, can be much more profitable.

Edit: New traders should scale out, not in.

sry