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Selling Rules

QuestionsCategory: QuestionsSelling Rules
James Goold asked 5 years ago
Hi Pat, My biggest problem in trading has been selling too early and not riding the trend.  Furthermore, I'm also keen to have a selling rule that gets me out quick if a trade isn't working early.  I need rules for this as being discretionary isn't working as well as it could.  I'm thinking of the following:  
  1.  On entry set a mechanical SL based on a point that gives the stock some room to allow for intra day spikes but have a get out quick rule of selling the stock if it closes 3% below the purchase price.  I've analysed over 200 trades and I would have missed very few winners if this rule had been applied;
  2. If the stock is below the entry price after a week sell;
  3. After the 5 day period if the price gets above 10-15% (the actual % decided depending on market conditions) sell 1/3;
  4. If the price then breaches the 20 day simple moving average sell 1/3; and,
  5. If the price goes below the 50 day moving average sell the remainder.
My review of my trade history has shown that rules 4 and 5 would have kept me in most longer term winners. Do these rules make sense?  Can you suggest how they might be improved?   Thanks and regards Jim
1 Answers
Avatar photoOwen Staff answered 5 years ago

Hi Jim,
Video from Pat:
https://youtu.be/VYeFfJFCsH0