When you're in a nice swing trade and it's running, do most of you prefer scaling out at predefined resistance levels or just letting a trailing stop do its thing and potentially giving back a chunk if momentum stalls? I've been trying to figure out which strategy leaves more money on the table for $AAPL or $MSFT type moves, or if it really just depends on the specific setup.
For high-conviction moves in names like AAPL or MSFT, scaling out is usually better. Trailing stops can give back too much profit on a normal pullback, especially when the underlying trend is still strong. You're essentially managing the trade, not just hoping it keeps running.
That's a great question, and I think it often comes down to individual risk tolerance and the volatility of the stock. For $AAPL or $MSFT, which can trend for extended periods, a trailing stop might capture more of a prolonged move, but scaling out could lock in profits more reliably at key psychological levels.
For those slower, large-cap moves, scaling out often seems to yield better results as you can lock in gains at key resistance points. Trailing stops can work, but I've often seen them give back too much profit on those types of stocks during natural pullbacks.