Who says a long-term position is boring? Usually one will have many short-term moves against the direction of the long-term position, so why let them go waste?
Options may cost less and give you more flexibility than outright stops. Here’s how to choose between options and stops and some ways of using both throughout the life of the trade. Look at the possibility of trading options too in the direction of the short-term move to pick up some short-term profits, essentially converting for eg., your long straight position into a long call option position by combining the long straight position with a put option and converting your short straight position into a long put option position by combining the short straight position with the call option position. That way for example if you had ridden a long bull market, you can reverse your position by simply selling your long straight position on a reversing signal or if you had ridden a long bear market, you can reverse your position by simply covering your short straight position on a reversing signal. A side benefit is that you are hedged against greater losses in the straight long-term position i
Related Questions
- Who says a long-term position is boring? Usually one will have many short-term moves against the direction of the long-term position, so why let them go waste?
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