Using Trailing stop to profit on HXL Swing Trade

HXL Entry  - Feb 16 @ $10.70  Graph from Clearstation

On this trade, I set the trailing stop intially at 5%. This was based on an approximate calculation of 1.5 times the average daily trading range. You don't want the stop to take you out just because the daily range is large.

Once the trade showed some nice profit and I decided I would be happy to take the profit, I tightened the trailing stop to 4%.



HXL Exit  - March 11 @ $13.50

I exited the trade at $13.50 on 3/11. 20% profit in under 4 weeks. 

From the graph, you can see I should have stuck with the trailing stop rather than my preset 20% profit point, and let this run a little longer. It jumped another 5% after I exited on 3/11.

The lesson is, if you are in a good trade, let it run with the trading stop, rather than tagging profit. That decision was fear based and greed based. Greed:  making a nice trade with a healthy return in under a month. Fear: Didn't want to lose the gain I already had, so closed out too early.