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When it comes to rolling winning trade positions, many traders, particularly retail traders, often struggle with knowing when and how to do it. Anton Kreil, Managing Partner at the Institute of Trading and Portfolio Management (ITPM_, has tackled this issue time and again in his teachings and mentoring sessions. Kreil emphasizes that rolling a trade is not something that can be easily taught through a set of rules or a video series—it’s highly contextual and varies based on the market conditions and the specific situation at hand.
In this blog, we’ll explore some of Anton Kreil key insights on when to roll a winning trade, common mistakes retail traders make, and why maintaining a strong pipeline of fresh ideas is critical for long-term success.
Why Rolling Winning Trades Isn’t a Simple Formula
According to Anton Kreil, one of the biggest challenges traders face is deciding when to roll a winning position. Traders often expect there to be a clear, step-by-step guide to help them make this decision, but in reality, it’s much more nuanced. Kreil explains that rolling trades is entirely dependent on context, and there isn’t a one-size-fits-all answer.
He has pointed out that many traders, especially those early in their journey, fall into the trap of wanting to turn every successful trade into a continuous trade. What they’re really doing, Kreil says, is transforming a trade into an investment—often unintentionally—and this can lead to poor outcomes.
Trading, by its nature, is dynamic. Positions will evolve over time, and your portfolio will look different depending on market movements and the time horizon. Therefore, Kreil urges traders to avoid treating trades like investments just because they have been profitable.
The Role of Taking Profits in Trade Management
Kreil stresses that part of successful trading is taking profits at the right time. This can be especially difficult for traders who have seen significant gains, as they may hesitate to close a winning position. Kreil highlights that when a trade matures, and you’ve hit your price target, the decision on whether to roll the position or take profits shouldn’t be based on emotions. Instead, it should be guided by an evaluation of the broader market and your portfolio's overall strategy.
He emphasizes the importance of asking yourself, "What do I do now?" when a trade reaches maturity. Should you take profits or restructure the trade? Kreil makes it clear that staying in a trade or rolling a position just for the sake of it, without a clear strategic reason, is one of the worst habits traders can develop.
Avoiding the Pitfall of Turning Trades into Investments
Kreil has observed that one of the most common bad habits among retail traders is turning a successful trade into an investment simply because they don’t know what else to do. This often happens when traders don’t have a strong pipeline of fresh ideas. Instead of exiting a position at the right time and moving on to new opportunities, they continue holding the trade out of convenience or fear of missing out on further gains.
Kreil explains that this issue usually stems from a weak pipeline of new ideas. When traders don’t have new trades lined up, they default to sticking with the ones that have already worked. While this might seem like a safe strategy, it often leads to diminishing returns or even losses, as traders hold on to positions that should have been exited earlier.
In Kreil’s view, traders with a robust pipeline of new ideas are never afraid to take profits and move on to the next opportunity. They understand that the market is full of potential trades, and there’s no need to cling to past successes. In contrast, traders with a weak pipeline end up falling into bad habits, like turning trades into investments and missing out on better opportunities.
The Importance of Having a Strong Pipeline of Ideas
A strong pipeline of new trading ideas is one of the most crucial factors in maintaining good trading habits, according to Kreil. He emphasizes that traders who consistently generate new ideas are more likely to take profits and exit trades at the right time because they’re confident that there are always new opportunities on the horizon.
To develop a strong pipeline, Kreil advises traders to focus on continuous research and market analysis. This includes staying updated on emerging trends, analysing different sectors, and exploring various trading strategies. He also recommends keeping a trading journal to track your trades, identify patterns, and generate future ideas.
Here are some of Anton Kreil tips for building and maintaining a strong pipeline:
Ongoing Market Research: Kreil advises that traders should never stop researching new trends and market opportunities. Staying ahead of the curve is key to finding fresh trades.
Diversify Strategies: To keep your pipeline full, it’s important to diversify your trading strategies. Kreil often recommends exploring different sectors, time horizons, and trading techniques to stay flexible.
Use Technology: Kreil points out that traders should leverage technology and trading platforms to scan the market for new opportunities. Tools like stock screeners and market alerts can be invaluable for staying on top of potential trades.
Have a Clear Exit Strategy: Kreil emphasizes the need to have clear criteria for when you’ll exit or roll a trade. Whether it’s based on reaching a price target, market conditions, or stock performance, having predefined rules will help you avoid emotional decision-making.
Common Mistakes Retail Traders Make When Rolling Trades
In his mentoring sessions, Kreil frequently discusses the bad habits that retail traders fall into, especially when it comes to rolling trades. He’s noted that many traders hesitate to take profits because they become emotionally attached to their winning positions. Instead of evaluating whether the trade still aligns with their strategy, they hold on too long and risk losing their gains.
Some of the most common mistakes Kreil sees include:
Hesitating to Take Profits: Retail traders often wait too long to exit a trade, hoping for additional gains, which can lead to losses.
Rolling Without a Strategy: Many traders roll positions out of habit or emotion rather than following a clear plan or strategy.
Weak Pipeline: As mentioned, a weak pipeline of ideas often forces traders to stick with old trades rather than exploring new opportunities.
Ignoring Opportunity Costs: Traders often fail to consider the opportunity cost of sticking with a mature trade when better opportunities are available.
Anton Kreil Final Thoughts on Rolling Winning Trades
Anton Kreil advice on rolling winning trades centers around discipline, strategy, and a strong process. There’s no universal answer to when you should roll a trade—it depends entirely on the context of your portfolio and the market conditions at the time. Kreil urges traders to develop a clear strategy for managing positions and emphasizes that rolling trades should never be done just for the sake of keeping a winning position alive.
Kreil also highlights the importance of maintaining a strong pipeline of new ideas. By consistently generating fresh trade ideas, traders can avoid falling into bad habits, such as turning trades into long-term investments or missing opportunities due to hesitation.
Ultimately, Kreil believes that successful trading is about managing your positions with a clear plan and being prepared to move on when the time is right.
Disclaimer:
The information provided in this article is for general informational purposes only. It is not intended to be financial advice and should not be construed as such. Always consult with a qualified financial advisor before making any investment decisions. The author and publisher are not liable for any financial losses or damages that may result from the use of this information.