{"id":150,"date":"2012-01-28T10:02:47","date_gmt":"2012-01-28T15:02:47","guid":{"rendered":"http:\/\/morpheustrading.wordpress.com\/?p=150"},"modified":"2012-01-28T10:02:47","modified_gmt":"2012-01-28T15:02:47","slug":"how-to-take-profits-in-a-winning-trade-green-mountain-coffee-roasters-gmcr","status":"publish","type":"post","link":"https:\/\/morpheustrading.com\/blog\/how-to-take-profits-in-a-winning-trade-green-mountain-coffee-roasters-gmcr\/","title":{"rendered":"How to take profits in a winning trade – Green Mountain Coffee Roasters ($GMCR)"},"content":{"rendered":"

When to take profits on a winner is probably the most difficult aspect of trading….. however, it’s a good problem to have! <\/p>\n

As short to intermediate-term swing traders, we prefer to hold positions anywhere from 5 to 15 days. Over the years we have found that most quality breakout or pullback entries can easily run 10 to 20% over a 3 to 4 week period. If this is the case then holding on to a winning position once it is up more than 20-30% is risky, as the stock becomes vulnerable to profit taking and a sharp pullback. <\/p>\n

So what is the solution? One approach is to sell into strength of a big volume up day once we have a significant winner. Once a stock is up at least 10% and we have held for two weeks or more we look for a big volume accumulation day to exit a position into strength. A trade we made back in 2010 in GMCR is a good example of selling into strength. <\/p>\n

We purchased GMCR in our newsletter on a breakout from a tight ranged consolidation on March 2, 2010. Prior to the breakout, we loved the tight base of consolidation at the 20-day EMA from 2\/5 to 3\/1. The chart below illustrates the buy entry:<\/p>\n

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

Here is the exit:<\/p>\n

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

After a 3-week hold, we used the strong breakout bar on 3\/17\/2010 to sell our position into strength and lock in an 14% gain. We only risked about 3.5% on the trade, so in terms of reward to risk we were at a healthy 4 to 1 ratio. Our job isn’t to catch the highs of the move. Our job is to make enough money on a trade to make the risk worth while and repeat this process over and over. <\/p>\n

One could also take partial profits into strength and hold on to the remaining shares with a stop below the most recent swing low. What you do depends on what you are comfortable with. <\/p>\n","protected":false},"excerpt":{"rendered":"

When to take profits on a winner is probably the most difficult aspect of trading….. however, it’s a good problem to have! As short to intermediate-term swing traders, we prefer to hold positions anywhere from 5 to 15 days. Over the years we have found that most quality breakout or pullback entries can easily run […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":"","_links_to":"","_links_to_target":""},"categories":[3],"tags":[],"class_list":["post-150","post","type-post","status-publish","format-standard","hentry","category-stock-trading-strategy"],"_links":{"self":[{"href":"https:\/\/morpheustrading.com\/blog\/wp-json\/wp\/v2\/posts\/150","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/morpheustrading.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/morpheustrading.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/morpheustrading.com\/blog\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/morpheustrading.com\/blog\/wp-json\/wp\/v2\/comments?post=150"}],"version-history":[{"count":0,"href":"https:\/\/morpheustrading.com\/blog\/wp-json\/wp\/v2\/posts\/150\/revisions"}],"wp:attachment":[{"href":"https:\/\/morpheustrading.com\/blog\/wp-json\/wp\/v2\/media?parent=150"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/morpheustrading.com\/blog\/wp-json\/wp\/v2\/categories?post=150"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/morpheustrading.com\/blog\/wp-json\/wp\/v2\/tags?post=150"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}