Rhody Trader

I received an interesting note this afternoon from a reader of the service I write for during the day. This guy is a big fan of my work providing day trading strategy for the S&P futures because my calls have been so profitable up to this point. His note, though, actually challenged me to give more thought to something which has already been making me wonder.

You see, the approach I use, as much for the sake of simplicity as anything else, is that when I make a call I take a kind of trend trading approach and let the positions go for as long as they’ll go, trailing a stop. While I do provide readers with target points where they can take profits, and sometimes even reverse, I just stick with the one position until the price action triggers my trailing stop.

The question I have been having is whether I’ve actually be doing myself and my readers a disservice by not exiting at the key target levels and putting on those reversal trades. Most of the time those target exits would be worth 10+ points in gains, while my current average winning trade is running at less than 10 points. That got me wondering.

Today, though, this guy Peter actually has forced me to really step things up. He used my proposed target exit on a short trade to book 17 points of profits, then used my suggestion of a reversal trade to take another 20 points out of the market. I, on the other hand, only booked 9 points for the day.

Hmmmm.

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