When I do a trade, I set my sell price immediately after the buy is filled. Typically my trades are targeted at making $1000.
This morning, during this hullaboo over the coronavirus I bought 1000 TSLA @ 545. I have a lot of long term TSLA held for years since the 180s, but this was for just a trade of additional shares. I set the sell at 547 to make $2000. this time, I figured I’d make a decent profit this time instead of selling too quickly.
TSLA didn’t really even hit 546 before falling back, to around 543. Eventually, I bought another 1000 at 542 (it dropped as low as 541 and change after my fill). Now my cost basis became 2000 shares at 542 + 545 / 2 = 543.5 I set my sell at 2000 shares @ 544.5 and this eventually filled, barely, giving me my target $2000. profit, and TSLA fell back after that and all seemed well as in, I sold at the right price given the weakened market.
But of course now TSLA is pushing 548. My original target of 547 was correct. It would have filled.
In general, every time I enter a trade and end up cost averaging, my original targeted sell price eventually comes back around. My instincts are solid. What does one do with that information? Cost average in but maintain the same original target price? or just stick to the original targeted plan of making just _____ (whatever the original targeted profit) and be happy with that, however achieved.