This post was contributed by a guest author, and does not necessarily reflect the views of Richard or MovetheMarkets.com

Take-Two Interactive Software, Inc. (NASDAQ: TTWO)

TTWO was a gap scan candidate. I entered below the OR high (a higher-risk flag), with a target of the 119% fib extension:

Once again I entered well, managed my stops well, but botched the exit. TTWO blasted up above the OR high, and quickly put me up 2R. It didn’t hit my target, so I held on until it closed back below the OR high, and I got out to avoid a loss (which I would have had if I had waited some more). I should have ratcheted up my stop to 1R at +2R, but the prints were pretty volatile and I didn’t want to get chopped out. It was really surging and I thought it could make my target if I held, but I was wrong.

I cranked up my % equity at risk for this trade to ~3.9% ($50). Without a textbook Trader-X setup, I shouldn’t do that. That system has a very high win rate if you pick ‘em well, and a 4% risk is justified there, but with anything else I need to stick with a 2% max equity risk (like my rules say).

This trade further shows where I am at in my progress as a trader. When I began, I was a very consistent trader–I could consistently lose money! I have been able to consistently not lose money for a few months now (since I switched to Zecco), and lately I can consistently break even. The next phase of my trading should be to start to consistently pull in profits. At least I’m out of the n00b-trader woods. :)

Please, any suggestions for profit-taking / preserving would be greatly appreciated! My only thought is to enter my initial stop as a hard stop, and then change to a trailing stop of 1R height once I’m up 1R. Then, if the target was not met, the exit strategy for a daytrade would be to wait until the end of the day, or a candle close below the 5-ema, or hitting the trailing stop. This way I’d give back the top 1R of the move, but in the worst case I’d break even…

Trade Summary:

TTWO Long 130 Shares
Entry: $20.21, Stop: $19.88, Target: $21.11
R: $42.64, Exit: $20.24
P/L: 0.10R, or $4.17

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This post was contributed by a guest author, and does not necessarily reflect the views of Richard or MovetheMarkets.com