When shorting, whats your usual % of gain before you get out?

Question

When shorting, whats your usual % of gain before you get out?

Answer 1

3 to 5%, but they are quick trades and I almost always close them out before the close. 20 to 30 minutes is average for me to hold a short position.

Answer 2

For the more disciplined traders, there should be no "%" to go by. If you are actively watching a stock, then you should be able to discern whether there is accumulation or distribution in the stock (whether strong or weak). And until the stock becomes strong, there is no reason to cover the position. If you shorted FRE at 20, would you cover 10% later at 18? Or 20% later at 16? ...It has thus far fallen to a low of about $4 (80%). By abiding by a rule, you would have limited your profit potential greatly. That all being said I would have covered at the open on Friday after the staggering gap down because I fear the FED will try and appease shareholders with a patchwork plan that they should have come up with months ago. The cover would have been at $4.25 or so.

Point is that giving yourself limits on the upside usually hurts you greatly. The only time to use limits of gain/loss are on the downside, such that you cut your losses once the stock goes against you x%. That is how smart trader, well, trades.

Keep the losses tight but let the winners ride until you are told otherwise. And if there is no reason to cover but you want to protect some profit...why not cover just a portion of the trade (50%)...

Answer 3

In THIS market, maybe 15%.

In a more normal market, I'd be tempted to let it slide a bit.

HOWEVER... remember a saying of Cramer's:

"Bulls make money, Bears make money, PIGS get slaughtered."