Exit a Position

[156 10]

Hello,

 

I have been paper trading for quite some time now and I have tested many strategies, some proved worthless some were good to an extent, I took a the pieces from the ones I liked and put them together - took me a lot of time to create a system that ... here is the catch - almost works I miss one thing and I could use some help. I average 8 out of 10 "correct" trades... but what I have in mind is that I am in the correct market direction 8 out of 10 times, but this is different than 8 successful trades... my problem is with the right exit - usually there are 2 scenarios - either I close 8 trades in profit and earn lets say 100$, I lose 200$ in the other 2 losing trades...or the most nasty one - not closing these profitable trades and letting them turn into losers.....

So I lack something - timing (which is not good) or a piece to my strategy ... please feel free to comment, suggest anything - articles and books to read I appreciate any help and thank you in advance

 

Happy trading!

[brownsfan019 17]

156 - as you will learn and have seen, just coming up with possible entries is one very small part of the equation. Many new traders don't fully get that until they've traded awhile. IMO exits are MORE IMPORTANT than entries.

 

As for how to exit and when, have fun. There are some threads around the depths of TL that discuss this very topic, you just have to search around for them.

 

Here's what you need to know right now - you will NEVER have a perfect exit ALL the time. You will NEVER catch every big move and then catch every small move. You WILL have trades that 'you got out too early' or 'got out way too late'. In the end, you have to decide what's best for you and your mentality. What I mean is, some like to try to catch that giant move and are willing to have some small losses/gains to get there. Others (like me) like to take a profit out of every trade if possible. It's like baseball - you can swing for the fences and strike out most times but also hit that big one or you can hit singles and doubles all day long but never hit the big one.

 

A hybrid would be to scale out, but again, that takes a lot of work as well to see what works for you. While getting some contracts out at +X pts and letting some run looks great, it can also be detrimental over the long haul as well.

 

For example, I personally have found that just taking regular profits each trade is just easier on me in so many aspects - mentally, emotionally, and monetarily. I often 'get out too soon' but I also book regular profits during the day. And it works for me. I go into each trade shooting for a specific target and done. And then repeat the process. Others will say you want to stay in the big winners. Neither is right as it depends on the individual trader and I stress - it's not JUST about the $$ here. The mental part of exits can literally drive you nuts, so see what works best for you mentally and then work from there. It's easy to say let 'em ride but when real $$ is on the line and you are in the face of a retracement back into your entry level... it won't be so easy to just 'let it ride'.

[Sledge 13]

It's easy to say let 'em ride but when real $$ is on the line and you are in the face of a retracement back into your entry level... it won't be so easy to just 'let it ride'.

 

Heh, I just got done responding to you in the "Capital Protection" thread, and then bam, here is more insight to my reply. I couldn't agree with you more on this. I think the "Trend Riders" have marketed the following steps:

1. Find Entry

2. Leave it Alone

3. Close out when trend is over

4. Make millions

 

As an "easy" and "sexy" way to trade, but I'm not sure if it is "easy" or "lazy" and if you bank money, wait for the retreat, and buy again, you get the benefit of getting paid twice when you pass the same part of the road you once travelled.

Aaron

[156 10]

Thanks for the replies guys I guess I will be working more towards signal confirmations and sorting the "better" signals from the worse ones, determining trend strength and trailing stops... maybe it is my psychology but it really affects me bad when I allow a winning trade to go a loser, so I am on reading

[brownsfan019 17]

Thanks for the replies guys I guess I will be working more towards signal confirmations and sorting the "better" signals from the worse ones, determining trend strength and trailing stops... maybe it is my psychology but it really affects me bad when I allow a winning trade to go a loser, so I am on reading

 

That's a big step 156.

 

If you find that you cannot mentally handle a 'winning' trade turning into a 'loser' then I HIGHLY recommend you have set profit targets that are realistic and achievable.

[walterw 10]

I think this is the area where the chimp conquered his excellence in trading, basicly having a good average entry criteria PLUS an excellent exit strategy, where you have an excellent RRR on your favor and at the same time you are profiting from a statistical daily range vs small fixed daily targets, simply the system rocks... unfortunately I am not giving the rules here on the forum...

 

Having good exits its for sure more important than your entries, obviously you want to enter on good competitive areas as well... but it will be a 50/50 game if you dont conquer properly your exits... my 2 cents, cheers Walter.