I know I promised not to talk about UNG again, but it finally entered the original swing trading target zone so I thought it would be useful to talk about trade management, i.e. balancing fear and greed.

Recall the original idea was to get short on the 19th with a swing trading target of 13.26 – 12.85. Really skillful day traders could have gotten short as high as 15.45. Every one of the free trading ideas I post on Twitter is conceptually sound (i.e. good in theory), but the tricky bit is managing the trade once it’s open.

When I day traded, I almost always went flat at the end of the day so I didn’t have to worry about managing my mental state over several days. With these swing trades, the best thing I can come up with is to exit part of the position on a reversal of the intraday volatility stop and carry the rest with a stop while waiting for the swing trading target zone. This way you satisfy both your greed and your fear, keeping your mental balance.

Following this thinking, with UNG you would have exited part of the trade at 14.65 on the intraday volatility reversal. Then the question becomes how to handle the balance of the position. The greediest way would be go breakeven and wait for the swing trading target to be reached. This would require a lot of patience, but would be the most rewarding. The scaredy-cat way to handle it would be to continue to trail some kind of stop on the balance, and as you can see from the hourly chart below, probably a ton of skittish shorts covered on the 25th and 26th.

When your initial stop is only 15 cents, every 1.50 you leave on the table is another 10-bagger. That’s why it’s probably best to stay at breakeven on the balance of your position and hang in there patiently. Thoughts from the gallery?