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What’s your portfolio driven rule to exit trades?

Full question: Can you elaborate more on your portfolio driven rule for trimming your winners? When an open position drops below the threshold do you exit right then or you usually wait to see if end of day it is still below that threshold? How far lower from your goal risk-multiple do you usually set your threshold? Thank you!!

Yes, this is a hard rule. Once it hits the threshold after being a legit goal risk multiple trade before, I will close the full position right away.

For a 3R trade I set the threshold to 2.6R. In general it is roughly half the risk but that value stems simply from experience. The goal is always to create a trade which has a logical scale-out level around my desired goal risk multiple. Once the desired scale-out is in place a trade rarely hits the threshold at all as it would now need to drop so much that I would sell anyway.

This however depends on the amount and therefore the magnitude of the cumulative scale-out. It’s when I wasn’t able to scale-out that this rule shines the most. It oftentimes allows me to secure my desired wins with regard to my win-rate. Both parameter are closely correlated


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