Profit-Taking And Resets Part 1: Trend-Following by Perry J. Kaufman
In this first part of a two-part series, we look at long-term trends and different ways to take profits and reenter trades.
As traders, we all like taking profits. It puts money in our pocket and increases the number of profitable trades. It keeps us out of the market so there is less risk, and if we can avoid a price shock, even better. For money managers, it also shows activity. An investor doesn’t want to pay someone who appears to be doing nothing but sitting on whatever positions are in the portfolio. A modestly active portfolio must mean the advisor is doing his or her best ...