How to Use Trailing Stops on Winning Swing Trades for Maximum Profit

Focus: ETFs

Deron Wagner Image Deron Wagner Founder and Head Portfolio Manager, Morpheus Trading Group

Pro trader Deron Wagner of Morpheus Trading Group, explains how he knows when it's time to sell a winning trade in order to squeeze the maximum amount of profit from it.

Being a consistently profitable swing trader is a juggling act that requires one to be constantly focused on a variety of key elements of success: picking the right stocks, managing risk, determining when to sell, and even mastering the psychology of trading.

In this educational trading strategy article, we will dive into the topic of knowing how and when to sell winning ETF and stock swing trades for maximum profit, using the example of an actual swing trade we are currently positioned in. As for when to sell losing trades, there's frankly not much to say other than always have a pre-determined stop before entering every trade and simply honor it.

Since April 12, the model trading portfolio of our swing trading newsletter, The Wagner Daily, has been long Market Vectors Semiconductor ETF (SMH). We initially alerted traders of the technical reasons we were bullish on the semiconductor sector (and SMH) in a March 28 blog post. Since then, we have also reminded regular readers of our trading blog several more times about the increasing relative strength in semis.

In the “open positions” section of today's Wagner Daily, subscribing members will notice we have trailed our (SMH protective stop higher for the fourth consecutive day.