Profiting From Low Fee Stock Trades - Holding & Exiting Positions
By Ultimate Trading
How To Increase Your Profits From Low Fee Stock Trades
Once youve found the best entry point for your low fee stock
trades, you need to keep your position out of trouble while you hold
it and wait for potential profits. How does a position get into
trouble? In an environment as volatile as
fee stock trades, there are many ways, but the one that often
triggers a position to move against you is market news. The only way
to guard against sudden turns in low fee stock trades is by setting
stops. Stops must be set on all low fee stock trades. This topic is
so important that Ive devoted several articles to it that you might
want to read for more detailed information.
But generally, when you make your low fee stock trades plan, you
must decide where to stop out if the trade goes against you. Do you
want to stop out of the stock at a small loss and abandon the low
fee stock trades, or average down by increasing your holdings at a
lower price, keeping a looser stop in place even farther down? The
best idea is to stop out at a small loss.
There aren't many times when averaging down works. You should limit
the averaging down option to extremely low-risk plays with high
chances of success. These should be low fee stock trades in which
you've determined that a price decrease to the level where you'd
average down is not a sign of an impending drop but just a temporary
move in the low fee stock trades range.
The best way to figure this out is by looking at support levels on
low fee stock trades charts. Averaging down does not mean you don't
have to set stops. It just means you'll set them lower and give the
low fee stock trades more room to move around before you trade out
of it. With appropriate stops in place, you will be practicing good
money management. And good money management is the key to protecting
your capital, keeping it intact for the low fee stock trades that
will create profits.
Once youve started to make profits on your low fee stock trades,
you need to decide when to exit the position. Your low fee stock
trades plan should tell you when it's time to exit. Knowing when to
exit is your low fee stock trades vital, because traders who hold on
to their positions too long often find that their paper profits
disappear. They often end up making no money, or even incurring a
loss, on what should have been good low fee stock trades.
To keep this from happening to you, its useful to think about how
the risk-to-reward ratio changes as your low fee stock trades rise
in price. The reward level decreases as the profits in your
portfolio increase. There is less reward there because you've
already collected most of it. The risk rises at the same time. As
the low fee stock trades price rises to a point where traders start
to question how much more it can move, they start to take profits
from their low fee stock trades. If the risk is increasing while the
reward is decreasing, at some point your risk-to-reward ratio will
become unfavourable. You will already know that point is for all low
fee stock trades, since you will have calculated it before you made
the trade, according to your trading plan.
Your plan may specify a particular number you've chosen as the exit
point, or it may tell you to exit when the volume dries up, or to
use trailing stops and hold the low fee stock trades until a
trailing stop is triggered. All of these are firm plans that tell
you when to leave the position. Your exit plan also may have
alternative exit points, and may tell you that if any of several
possible things happen, you should exit. These are all good exit
As long as you have an exit plan in place that is triggered by an
unfavourable risk-to-reward ratio, you will never lose your
fee stock trades. Instead, like all other successful traders you
will take your low fee stock trades at the point that is best for
your personal trading style, in accordance with your carefully
thought out low fee stock trades plan.
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Fee Stock Trades