ABCD and Partialing tips

[Judaka 0]

Hello,

I am learning the ABCD pattern, I have watched all the webinar in the education centre but I did not see anything covering tips or methodology for partialing. Can anyone share with me their attitude towards partialing or point me in the direction of somewhere to learn about partialing?

Is it mainly determined by technical factors like overextention and ATR? Based on your R? Price analysis? Patterns forming against you? Your targets? I want to create a checklist regarding what to look out for and when to partial and know I am doing it properly.

Edited April 22, 2021 by Judaka

[Judaka 0]

5 hours ago, peterB said:

if you enter a trade you should know your target. that is where you etiher partial or go all out. simple as that.

I expected it can't be as simple as that because many webinars have discussed partialing based on all the things I listed, depending on the context. I am just lacking a structure or process on how to put all of the pieces together. Andrew showed examples of exiting before being stopped out when the trade starts to go against you, Aiman gave examples of partialing due to expectations of a pullback based on the larger timeframes and overextension from the exponential moving averages. 

Targets are probably most important, however, if someone is going for a target like ATR, I notice some traders may begin to partial at 2R, 3R or maybe at resistance levels on the way to the target - they will partial long before they exit the trade. I am trying to develop some rules for myself based on what experienced traders are doing to keep myself on the right track.  Having a clear methodology for setting my targets is something I lack so I may not understand, trade management in general is unclear to me. I get that it is kind of a personal thing but I want something to start with as a foundation. 

 

[Judaka 0]

Thanks peterb,

I have read that thread before making this thread while looking for information about partialing but it is a good one, when you said partialing too early can be a mistake, I immediately thought of this thread. Along with some of the downloads in the education centre, I was taught the importance of aiming for good risk/reward ratios. The ABCD pattern can occur at any time, on any timeframe, sometimes 7R is possible, sometimes expecting more than 2R is unrealistic. I would like a more concrete plan but I need to be flexible based on my target. If I understand correctly, partialing is a way to lock-in some of a successful trade to minimize risk, not a way to min-max the profit of a trade. ABCD is a trend continuation strategy, I want to let my winners run but I should partial if a pullback seems likely such as due to price analysis, overextension or at important levels. I could also partial due to my R, to minimise the risk of losing all of my good run. 

So partialing is part of my risk management, if my target is 4-5R then that's my goal but if there's a resistance or pullback on the way, I partial that so I don't simply fall to break even if I don't make my target. Is that correct? 

I think I need more flexibility than saying I will partial X% and Y% at 2/3 R 100% of the time, is that incorrect?

 

[sunspore 6]

I track a number of stats on all my trades. One of these stats is how many R the trade could have made if I had let it run and taken profits at the absolute best spot. This is called the maximum favorable excursion (MFE). By tracking your trades in this way, you will gain insight into what areas are reasonable to take profits. If you see that only 10% of your trades make it to 4R, you may want to partial much sooner and take bigger chunks with those partials. 

A lot of this is psychological as well. I keep very tight stop losses, and I am quick to jump out of a trade as soon as it doesn't work. I settle for small gains on my trades, but my win % is very high. This contributes to a decent profit factor, which is ultimately the most important aspect of your trading. I leave a lot of money on the table because I exit quickly, but I don't like to sit through pullbacks or give back unrealized gains. I'm happier this way, and that's important. 

You will need to do this type of work and self reflection to figure out what your trading is capable of, and what your psychology will allow.