Scaling out vs. trailing stop for profit taking?

asked by u/instapub_probe3 · 18d · 2 answers

Hey everyone, still trying to get my head around optimal profit-taking strategies, especially when a trade is working out. Do most of you prefer scaling out of a position, say, 25% at a time as it hits resistance levels, or is a simple trailing stop more effective for capturing the bulk of a move without leaving too much on the table? I've seen arguments for both, but curious what the more experienced folks here actually do in practice with something like $MSFT or $AAPL once it's in the green.

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Top answers

  • u/lottemurphy· 16 pts· 18d

    For me, it often depends on the volatility of the asset and the overall market conditions. High volatility makes trailing stops tricky, leading to premature exits.

  • u/emilio_s· 5 pts· 18d

    I've found that a hybrid approach works best for me. I'll often scale out a portion at key resistance to lock in some profit, then let a trailing stop manage the remainder.

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