My biggest challenge is dealing with a pullback from a strong winning position. I’m on when share is moving within a trend typical range but frequently some have then jumped from a 1-3% to 5-10% in consecutive days and putting my stop loss a long way away. Any sign of a pullback and I am looking to take profits. I have been managing by taking a small amount (25%) or moving the stop loss if there is a clear support level. This is really impacting my big winners. One share for example when up 40% this month but my actual gain is actually 22%. It is still a healthy gain and I’m not sure if actually is right because for each one of these there are plenty that do pull back and as long as I keep my risk level to a stop loss within my agreed value then I am within my strategy and plan. But perhaps I need to rethink my risk value? It is particularly hard when I picked a share on support from a sideways range (stage 1) and then breaks out with 3 to 5 days of ups. I am starting to think perhaps my current mental strength is more suited to that of swing trading; although for shares in a more steady up and down pattern (8% in a week then pull back 3% over a couple of days) I am very cool at riding those trends.
“Support?” “Pullbacks?” “Taking profits?” “3 to 5 days of ups?” “Very cool?”
Why not ditch all of that and go trend following?