250221 - residual trading is to leave some lots behind by not selling the total accumulated
lot size of 70lots.
As the stock started to trade higher, we do not know when the selling spee will come
and quickly dissolved all the profits on the table, as such it is advisable to take profits
along the uptrend during a massive rally. In many times, we hope to know where
the trend will end so that we can sell before the price starts to fall and stop eating away
the profits. But it is rather tough to catch the bottom and top. Even then, holding
overnight also carries risks as any devastating bad news after trading hours will affect
the stock price to open gap down violently the next day and take away all the profits
and even worse, below our entry price.
Therefore, it is advisable to sell into the rising market and secure the good profits without
much effort.
But do you sell all the lots?
In actually fact, always leave some lots around so that in the future, you can perform
average in the trade as the price continues to move higher after a retracement. e.g. 20%
So how I decide where to sell and how I know my potential hit rate with confidence,
for example, we assume that the start of the bullish move from 0.05 to 0.14 level.
Refer to the chart, $0.05 (triggered "Super Golong" Gold Diamond Proprietary Indicator),
showed the price started to move up from $0.05 level. Assuming my maximun profit level $0.14.
This is how I calculate the hit rate to certain degree of accuracy.
As you can see that the closed price today is $0.119 which is at 75% price target and
moving towards the 100% price target, the chance is 5% luck...
So what I did was, as the price moved towards 50% price target, I decided to unload some
of the holdings as I know the probability of hitting the next price target 75% is getting
slimmer...
What I meant by "Residue Trading Strategy", this is a strategy that I have designed
and implemented in my trading and has helped me to achieve more profits.
By leaving about 20% of the total lot size in the stock, we have a potential opportunity to
continue averaging in as the stock price starts to recover and move up the trend again.
If it does not show sign of uptrend by continue to trade lower, you should just exit with the
remaining profits made from this 20% holding and be happy with what you have made.
Trading is more like a mind game, we are playing tactical game between two ears.
As shown above, I have 20lots@$0.095 left in the game to continue achieving more
profits for me. As I have already realized 79% profits, it is ok to let this 20lots to
continue to fight for more profits for me.
Happy Profitable Trading.
