David
David Patrick has traded bond futures,spreads,equities and options for over 20 years. He graduated from The Ohio State University with a degree in Finance, in 1995. He started his business career as a Trust Tax Accountant for National City Bank. He became an Investment Advisor at Olde Discount Stockbrokers in 1998. Five years later he became a top trader for Elite Trading LLC. At this hedge fund, David led a team of traders specializing in bond future spreads to an impeccable track record. In 2008 he branched out on his own and became a very successful Independent Trader. On January 25th, 2013 he successfully launched Fitzstock Charts Premium Service. This elite trading service has helped traders around the world learn his proprietary trading methodology.
David, I’m still confused. At what point do you ever close a trade out with your stop at breakeven? Do you let the free runner come all the way down and stop you out eventually? That would make no sense.
Eugene,
It is very important to let your winners run (infinitely). You can keep scaling profits and rolling out to the next months calls (only risking a % of your profits, as you are trading the “houses money”)
Stocks like REGN, TSLA, GOOG, LNKD, NFLX, FB and many more would have made your year, using this trading methodology (of riding winners and then ADDING to them)
I understand the rolling, so the only way the position will EVER get closed is if price comes back and violates your entry? Lets say that occurs two months later. Wouldn’t that result in a SUBSTANTIAL loss of a HUGE winner?
No,
You keep scaling your winner and booking profits. Then you roll with a lower amount of capital (but more contracts, at a higher strike)
It is imperative that you ride your winners, in a raging bull market. Risking a portion of your gains is part of trading.