{"id":10780,"date":"2011-04-06T15:17:48","date_gmt":"2011-04-06T19:17:48","guid":{"rendered":"http:\/\/www.smbtraining.com\/blog\/?p=10780"},"modified":"2023-05-09T07:46:42","modified_gmt":"2023-05-09T11:46:42","slug":"traders-ask-gd-trading","status":"publish","type":"post","link":"https:\/\/www.smbtraining.com\/blog\/traders-ask-gd-trading","title":{"rendered":"Traders Ask- GD Trading"},"content":{"rendered":"

Hi Mike,<\/p>\n

I am hoping for your insight on a trade I’m making today.\u00a0 My uncertainty in this trade it typical of what I find in a lot\u00a0of my trades.<\/p>\n

I am trading GD as a second day play.\u00a0 My thinking is that the sell-off yesterday was overdone and that it ultimately held important support at 73.\u00a0 I was looking for the stock to break yesterday’s resistance of 73.84, however I waited for 74 to be taken out as i felt this was more likely the key number.\u00a0 My thinking was twofold.\u00a0 1.\u00a0 The stock could trend higher from 74 to 74.70 (yesterday’s high) and with a .15 stop below my 74 entry this would be roughly a 1:5 risk\/reward.\u00a0 2.\u00a0 If GD trades through 74.70 it could trade quite a bit higher as it fills yesterday’s gap down.<\/p>\n

But here is the question, do I need to adhere to just one of these trading plans?\u00a0 If I don’t take my 5x profit at 74.70 the stock could easy reverse at this resistance and trade back down.\u00a0 I don’t like establishing a potential reward and then getting greedy and not realizing it.\u00a0 On the other hand, I don’t want to sell myself short here on what could be a strong move.\u00a0 Do I take off half the position?\u00a0 Do I take off the whole position, realize the profit, and trade the 74.70 level as a new trade?\u00a0 Do I just raise my stop and let the stock trade at this level for awhile? (This option is appealing because if it consolidates below this level it might be a good sign the stock will move higher.\u00a0 However giving it the proper space may mean risking a large share of my unrealized profit.)\u00a0 Do I get bigger position size if the 74.70 breaks?\u00a0\u00a0 The root problem I’m having is whether or not to book profits when my predetermined reward is achieved, or to let a trade that is working keep working.\u00a0\u00a0 I’m curious for you insight, I find this one of the hardest parts of trading.<\/p>\n

Thanks as always for your generosity with your time.<\/p>\n

\"\"<\/a><\/p>\n

Bella <\/strong><\/p>\n

I will answer the question from the facts you stated and from your thinking above. \u00a0You wanted to make a trade from 74 to 74.70. \u00a0This was your trade. \u00a0Thus, when GD approaches 74.70 it is time to exit. \u00a0And then yes there would have to be a hold above 74.70 and a new trade that you develop above this important level. \u00a0We would call this a new Support\/Resistance trade.<\/p>\n

You could have started this position and noted the 74.70 as a place to be cautious but not necessarily get flat. \u00a0But again this was not your thinking when you entered the trade. \u00a0Thus the exit at 74.70 was essential.<\/p>\n

Great question. \u00a0Keep working on your trading game!<\/p>\n

Mike Bellafiore<\/p>\n

Author, One Good Trade<\/p>\n

thanks so much for the review Aynul<\/p>\n","protected":false},"excerpt":{"rendered":"

Hi Mike, I am hoping for your insight on a trade I’m making today.\u00a0 My uncertainty in this trade it typical of what I find in a lot\u00a0of my trades. I am trading GD as a second day play.\u00a0 My thinking is that the sell-off yesterday was overdone and that it ultimately held important support at 73.\u00a0 I was looking … Read More<\/a><\/p>\n","protected":false},"author":144,"featured_media":10782,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[10,908],"tags":[1702,30,81,1193,653,1354,1349],"class_list":["post-10780","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-mike-bellafiore-bellas-blogs","category-traders-ask","tag-gd","tag-prop-trading","tag-smb-training","tag-trader-education","tag-trader-training","tag-trading-coach","tag-trading-mentor"],"yoast_head":"\nTraders Ask- GD Trading | SMB Training<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.smbtraining.com\/blog\/traders-ask-gd-trading\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Traders Ask- GD Trading | SMB Training\" \/>\n<meta property=\"og:description\" content=\"Hi Mike, I am hoping for your insight on a trade I’m making today.\u00a0 My uncertainty in this trade it typical of what I find in a lot\u00a0of my trades. 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