Position Manager

Exit when: 1) Stop loss is hit (planned max loss), 2) Profit target is reached, 3) Your thesis is invalidated by new information, or 4) Time stop expires (position stagnant too long). The key is having these defined before entry.

You should only move stops in your favor (tightening) to lock in profits. Never move a stop further away to 'give it more room' - that's letting a loser run. Consider moving to breakeven after 1R profit.

Depends on your capital and style, but typically 5-15 for most active traders. Too few lacks diversification; too many is hard to manage well. Quality over quantity - each position should have a clear thesis.

Both matter, but management often determines final outcome more than entry. A mediocre entry with excellent management (proper stops, scaling, patience) often outperforms a great entry with poor management.

At minimum: once at open, once at close. For active traders: multiple times during the day. Set alerts at key levels so you're notified when action is needed. Don't obsess, but stay informed.

Scale in when: 1) You want to build a larger position at better average, 2) You want to add after confirmation of thesis, 3) Pullbacks in a trend offer better entries. Always have a scaling plan; don't randomly add.

Options: 1) Sell before (avoid event risk), 2) Reduce to half position, 3) Hedge with put (protect downside), 4) Hold full (if confident in outcome). Check option implied move to understand expected volatility.

A trailing stop moves up with price (for longs) to lock in profits. Use it when you want to let winners run without giving back all gains. Common approach: trail 2× ATR behind price. Best for trending positions.

Treat them as a unit. Track aggregate sector exposure (not just individual). Set sector-level limits. Consider a single sector hedge instead of individual hedges. If too concentrated, reduce to fewer positions.

Adjust targets when: new information suggests higher/lower potential, price action shows strength/weakness beyond expectations, or market conditions change. Don't lower targets just because impatient - that's different from valid thesis change.

Calculate total open risk: sum of (entry - stop) × shares for all positions. Limit total heat to 6-10% of portfolio. If heat is too high: don't add new positions, tighten existing stops, or close some positions. Heat should never exceed your max drawdown tolerance.

For longs: close or roll by 21 DTE (theta accelerates), take profits at 50-100% of premium, cut losses at 50% of premium. For shorts: close at 50-75% of max profit, roll if tested, manage assignment risk. Always know max loss.

Only add to positions after they show profit (typically 1R). Never add to losers. Method: Start with base position, add equal amount after 1R profit, possibly add again after 2R. This concentrates capital in winners.

During market stress, correlations spike (everything moves together). Options: reduce overall exposure pre-event, hedge at portfolio level (not position level), accept correlated risk if long-term, or use inverse ETFs/futures for market hedge.

Research suggests: take some profit at 1:1 R:R (reduces risk of round trip), let remainder run with trail. Exact approach depends on strategy - mean reversion benefits from fixed targets; trend following benefits from trailing stops. Test what works for your approach.