Thread by @team3dstocks

Same answer as usual.. Data. Here are 5 steps to optimize your exits (stops & targets):

1) collect as much data as possible on ur specific niche

2) categorize each group of trades/stocks into specific setups

3) For each setup, find out the ideal (most consistent) entry signal

https://twitter.com/AbramianAdrik/status/1352387245450256385

4) calculate what the average selloff % (bear) or squeeze % (bull) is from the entry signal. that'll give u an idea of where to look for targets

5) calculate how much the stock usually rips against the entry signal when the setup fails. that'll help u with stop loss placement

So in short, you NEED to know your setup's RANGE. How much does the stock move (on average) when the entry triggers? how much does it move against u when the entry backfires? If a stock usually moves $1.00 from the entry signal, then obviously dont have ur target $2.00 higher

In the same scenario (stock usually moves $1.00 from entry signal), u also dont wanna put ur targets at +$0.10-0.20 cents. you're leaving way too much on the table.

Same for stops. dont have it too wide or too tight, RELATIVE to what ur data shows (the stock's usual wiggle room)

ONCE u've identified those metrics, u now have STATISTICS on ur side. not bum ass "intuition" & random ass guesses/hunches that cant be backtested.

From here, u can optimize exits even further by adding in indicators & other exit signals, for extra confluence

#BearTipOfTheDay

Oh and lastly, dont be a fucking pussy. the fear of "what if i dont take profits early & it reverses" will cause u to ALWAYS underperform. And the fear of "what if i take profits AT TARGET & it keeps going" will make u turn a green trade red. TRADE THE DATA, not ur fears & hopes