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Angeline it depends on your investing strategy, for me I allocate 30% for Long term ,70% for swing trade (I play for intraday and intraweek). It’s actually ok to sell at a profit, because you never know how the market will move , it’s hard to predict. For my short term investment as long as it hit my 2R profit target I will sell . For example I buy at RM 2 , then my cut loss is at RM 1.80 , so my 1R is 0.2 , and 2R is at 0.4, and I will sell at RM2 + RM 0.4 = RM 2.40. If I lose I lose 1R but if I win , I win 2R , so in a month assuming you have 20 trades , and you lose 10 times , and win 10 times , the end result is still a profit with 10 R . Hope this clarifies :))
Hi Christy , R refers to the magnitude of risk , and it can be implied as both an increase of 20 cents (When price goes up beyond your entry price)as well as a decrease of 20 cents (price goes down beyond your entry price). So for counters that are 5 and below , I usually set a 0.15 cents cut loss amount. In that case my 1R is 0.15 cents, and I usually take profit at a 2R target. Note that 2R target is calculated from the entry price. So if I entered at 2 , I will take profit when price hit 2.30 , and assuming I bought 10 lots , my profit is 300 and if I lose , I would cut loss at 1.85 and I lose only 150 . And if you do 20 trades a month with a R of 0.15 cents each time , and assuming a probability of 10 wins and 10 losses , in a month you will have a profit of 1500 dollars. I find this strategy quite useful for me but there are times where there exists some bad market sentiments and instability , and if I felt the 2R target could not be hit , I would allow myself to take profit at say 1.5-1.8 ish target range. Hope my explanations sounds okay hahah :))