glittle56

In my experience, entries are of course important and I personally choose market direction based on fundamental drivers. eg if Eurusd is bearish, then I will be looking to short the rallies and only trade in one direction. This analysis requires an understanding of global economic issues and a lot of reading. In this case I find entries to be the easy part. The exit is not so clear or well defined. For example, you may set a PT of 2:1 with a SL of 50 pips so you are aiming for a profit of 100 pips. The market doesn't know what you want but your retail broker does (that's another issue to overcome), you watch the trade reach 95 pips in profit only to see it turn and hit your SL of 50 pips. Your account has just experienced a nett loss of 145 pips. You have just relinquished a 95 pip profit and turned it into a 50 pip loss. That hurts! This happens a lot and then causes doubt and fear and you then start to trade emotionally by cutting the trade short of the PT, only then to see the trade exceed the PT by 200 pips. Now you are feeling that you have lost potential profits and maybe you should let the trade run. This emotion based trading is gut wrenching and trading suicide. I think the plan for exits should be clearly defined in your trading plan and then stick to it. If you plan to take a set PT of say 50 pips, then the market moves 150 pips, so what, you have your 50 pips profit and you should be happy. Do not lament about lost profit because you will never know when the market will turn. Anyone can backtest a plan, it all looks so simple in hindsight with the completed chart in front of you, but it all falls apart when trading in real time. The pivot point isn't clearly defined until 2 candles later, the technical indicators are lagging, short time frames are too random to be useful or consistent in the long term. I think that whatever exit strategy you use, it must be based on taking consistent, smaller profits, more often and not be sucked into the greed and fear cycles that trading brings out in all of us. You can make a living on 20 pips per day. It just depends on whether you can consistently make 20 pips every day on average and then how much per pip you are trading with. $100/pip x 20 pips = $2000/day. My point is you don't need thousands of pips to be profitable but you must be able to cut losses quickly and bank profits often. Therefore you need to be decisive, business like, unemotional. Think of trading as profits and expenses just like any other business. Wins and losses sounds a lot like gambling. In trading, losses are an integral part of doing business just like buying stock in the hope you are going to sell it. You may get stuck with it, but that's the cost of doing business and your profits must outweigh the costs. Many novice traders beat themselves up when they have a loss but this is the wrong frame of mind to be in. Losses are trading expenses and nothing more.