Possible Exit Methods

[brownsfan019 17]

Since many threads end up asking about how to exit a trade, I thought we could all compile one thread that shares the many, many ways to exit a trade. Obviously nothing is perfect, but this could be a nice resource for everyone.

 

So, if you are willing to share, post your exit method(s) and why you like them. It might be easier to post one method per post so that info does not overlap and confuse anyone. Let's try to give the full story - the pro's and con's of each method.

 

Also, if you want to debate the merit of the strategy, start a new thread or continue in another discussion if you can. If possible, I'd like to keep this thread clean, so feel free to link to another discussion. In other words, it would be nice to have one clean thread about this topic vs. this turning into a 'I love XYZ method' and 'I hate XYZ method' and then every post is about XYZ.

 

My example...

 

EXIT METHOD: Wide Range Body (WRB)

PRO'S: When they appear, can provide very timely exits.

CON'S: If they do not appear, you need to have a plan B for exits and/or end up letting the trade possibly retrace.

MORE INFO: http://www.traderslaboratory.com/forums/f34/wide-range-bodies-big-candles-1480.html

[Soultrader 12]

Exit Method: Fixed Targets & Tape

PRO'S: Exit at first warnings. Easy to spot sellers.

CON'S: Tendency to exit too earlier. Will not sit through pullbacks majority of the time.

COMMENT: One really needs to understand the tape of the contract he trades. The ability to see the action behind each price level is important.

[Guest cooter]

EXIT METHOD: Oscillator divergences at peaks (and troughs) of price AND volume.

PROS: Volumetric oscillations provide early indication of price reversals.

CONS: Subjective as to which signal to take. Early exits from valid trends possible.

COMMENTS: Second or third divergence often works better than first such pattern.

[SpecTrade 10]

EXIT METHOD: 3-day or 5-day low (for longs) trailing stop

PROS: Can keep me in a trade through minor pullbacks

CONS: Often leaves too much on the table

COMMENTS: Combined with ATR and adjusted from market to market works better

[SpecTrade 10]

EXIT METHOD: trendline trailing stop

PROS: can keep me through minor pullbacks

CONS: subjective to draw

COMMENTS: good validated trendlines are actually better for re-entry (bounce or PA forming on the trendline), so I would prefer to trail my stop somewhere between trendline and the low

[SpecTrade 10]

EXIT METHOD: moving average trailing stop (EMA or SMA: 6, 9, 13, 20)

PROS: provides dynamic trailing stop based on price average

CONS: Subjective as to which MA we choose, what value, and to which market

COMMENTS: taking half off on shorter term MA, then with stop set to b/e trail with longer terms MA... but again it can leave too much on the table. However, combined with ATR stops it works for me.

Edited August 25, 2011 by SpecTrade
addition

[cjaymanny 10]

Exit Point: Support n resistance levels

Pros:Allows me to enjoy trending markets

Cons:Sometimes price wont get there

Comment: When combines with ATR,i trail my stops..1/3 out @ 10 pips 2/3 out @ 20 d balance is trailed till i am stopped out