Taking Profits by Selling Half Your Position
Posted on Tue 26th Jun, 2007 05:48:19 PM
This post has been moved to the following location,
Stock Tip #1 – Take Profits By Selling Half Your Position
I must say that I was never crazy about taking half off the table. When I make a trading move, whether right or wrong, I try to make it with conviction. I find that this strategy actually takes me away from the laser beam focus that I really need to be a successful trader or investor.
Taking half of the table in many ways is analogous to playing the tables in Vegas and being up 50% and saying well I’ll just play with some of my winnings. I usually walk out with less than I started.
Of course, there are times that you would want to employ this type of strategy if, for example, liquidity was an issue. Other than that, I’m not a big fan of this strategy.
Proponents will say that you minimize my risk. My feeling is that if the trade was successful, there is no better way than to minimize my risk than to close out the position. It’s just a matter of style.