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1. while taking swing trades on higher time frame charts like 1hr and the stock enters a wedge or range which can take 1 to 3 days to end in this meantime if we find other good setups we cannot take them as we have invested our entire capital or sometimes we have to increase our risk.
Can we exit some positions in the existing trade and invest in others?
2. What is your idea on getting exposure for trading & is there any way we can use it productively?
Hi Kamala,
I wouldn't exit part of my trade so I can use the money to enter another trade because I don't have sufficient funds. This approach to trade management is against everything that Al teaches. Please, revisit the course material regarding Trade Management.
Each trade should be managed independently from all other trades. Each trade should be viewed as unique and if you have to exit a part of your position it will only be in view of the current market conditions pertaining to the trade in question.
thanks for the reply.
I will check that video.
during intraday, it's not a problem as I would take only one position and maintain a risk of 1% of my capital.
when it comes to positional trading in 1hr mostly take multiple positions where I split the risk of 1% into 0.5 per trade.
during those conditions a few times, one trade will move in our favor forming continuous breakouts but on the other trade would not move much or enter sideways.
during those conditions a few times, one trade will move in our favor forming continuous breakouts but on the other trade would not move much or enter sideways.
Once you are in a swing trade and the market starts going sideways, you might consider exiting or scalping out your trade, since your original premise might have changed. You took the trade expecting a trend but instead the market went sideways.
That is one way to manage your swing trade - when disappointed then exit or scalp out. The other way is to just rely on your swing stop.
thanks
initially, I was confused with and I too had the same idea.
thanks for your comments.
In general, Al recommends not to risk more than 1% on any trade. This means total dollars at risk from your stop to the current market price (see video 36A slide 9) for more details.
As for exiting a trade to deploy the capital elsewhere, I would not look at it this way. It is okay to exit and look for a different trade if you think the market may soon go sideways, but I would not exit a trade so that you can deploy the capital somewhere else. Every trade should be treated as its own.
thanks for the reply.
I will check that video for further clarification.
