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| By | Profit Taking | |
| GlennF 11/29/2008 10:20:15 AM | I have long felt that a optimal approach to profit taking would make a HUGE difference in maximizing profits/minimizing losses. I once saw a mathematical model for profit taking but it was beyond my mathematical comprehension. (I could probably locate this model if there is someone with more mathematical acumen than I interested). I would like to know if anyone has any thoughts or suggestions about the best approach to profit taking.
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| jeff 11/29/2008 1:17:09 PM | IMHO, if you plot bankroll growth on a curve you'll see a lot of peaks and valleys. Trying to accurately time profit taking to take advantage of those peaks and valleys is not something I've been able to do with any accuracy. Two simple thoughts on profit taking... 1. Max earnings/bankroll growth - If the set of active UDMs is producing then not taking profits (from a purely mathematical standpoint) is the correct choice. Simply put: more money can be earned with a larger bank (not taking profits) than can be earned with a smaller bank (taking profits.) You'll earn more by carrying your edge into the long run churning as many $$ as you can up to the point of not hitting the pools hard enough to negatively impact your own odds. 2. Emotional State/Living with yourself - If the reason(s) you are in the game changes then profit taking becomes the correct thing to do. Example: The bankroll when you started was small and losing it would not have mattered. But now that it has grown to the point of being large/significant the amt of money it represents matters to you. Taking profits at this point is something you might want to consider. -jp .
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