Exiting a trade?

This is a discussion on Exiting a trade? within the First Steps forums, part of the Reception category; Originally Posted by spinola Here is my take on things, If you understand why you are entering a trade, you'll ...

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Old Nov 5, 2010, 2:00pm   #15
Joined Sep 2008
Re: Beanz Meanz Pips !

jd1888 started this thread
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Originally Posted by spinola View Post
Here is my take on things,

If you understand why you are entering a trade, you'll know when to exit it. (leaving aside any individual neurotic human behaviour, technological interferences )

This pondering seems to crop up all the time and to help a trader get to a point from which to progress I would ask them this,

Do you believe the markets are random or not , or are you not really bothered in knowing that ?

I say this because once a person is aware of his natural internal driver in pursuit of knowledge of his/her subject in focus, then it may help in them being suited to developing a particular fundamental strategy with fits their personality looking outwards at the subject matter.

I also think if a person is not aware of this, then I wouldn't be surprised to see erratic emotional driven decisions surfacing, as the internals actions of an individual have no solid belief foundation on how to manage the external fluid actions that the market will continually throw your way.

So personally I would want to get this awareness set at the earliest opportunity within the individual. And yes, it may often be that the trader says, "Hey , I just don't know the answer to that yet." And at that point, I would advise that they need to find it (the answer) before they can expect to make solid progress based on understanding that their internals now are ( at least )aware and are therefore more comfortable and expectant, of how to manage the external market incoming.


I'll call it the "Matching Principle" .

I mean its all about how you cook your beans. Some people will use a microwave, slam them in nuke the hell out of them, hot over cooked beans here stirred in with luke warm beans there, hey that's cooked beans right ?

Well for them yes, maybe their internals are happy with that,maybe they are not aware of any other way, but I couldn't cook my beans that way, nor do I , as I understand it impairs the beans performance, so my internals drive me to cook the beans in suitable sized pan over a steady controllable flame, gradually heating the beans evenly .

That's how I must cook my beans , understanding the ingredients and the energy forces applied to them, and how the beans are likely to react in that environment !

If you want to understand the market and trading, first understand beans and baking them.


Just my beans into the pot.
Nice post.

The beans part f**kin hilarious. I also cook my beans in a pan but thats because I have no microwave, having said that though I belive a pan is better anyway for the reasons you've stated. LOL

On a serious note though I think you've hit the nail on the head it is more of an internal problem than signal for exit etc.

I'll try to answer the question random or not?

I think they have to be random in some sense, the fact that there is so many traders/institutions trading them they all can't be communicating with one another to say buy here sell here.

But on the other hand certain markets can be moved and manipulated by the big players which would make that market not quite so random.

So I guess my answer to the question shows why I p*ss about with my trade so much, INDECISION. Would you agree Spinola?
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Old Nov 5, 2010, 2:13pm   #16
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Re: Exiting a trade?

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Originally Posted by HowardCohodas View Post
In my naked trading days (not trading naked days) I finally, after much study and experimentation and testing my personality, came up with the following method. I believe I learned it in one of Dr. Alexander Elder's books.

My money management methods determined how much I was willing to risk on any trade. That determined precisely where my stop loss went for the trade under consideration. If that seemed rational given other indicators, I entered the trade. I then used a trailing stop if the market moved in the direction that made the trade profitable.

Did I hit a stop loss just before the market took off in my direction? Sometimes.

Did my trailing stop get me out too early in a large move? Sometimes.

Did I make money without serious draw downs? Always.

Why did I abandon this technique if it was profitable? Boredom. Focus on cash flow.

Live long and prosper.
I have read one of his books can't remember which one it was though.

I suppose the worrying about what could have been isn't important in the grand scheme of things it's net profit over the long term that is. LIVE LONG AND PROSPER is the simply moto of that I guess.
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Old Nov 5, 2010, 3:03pm   #17
 
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Re: Exiting a trade?

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I suppose the worrying about what could have been isn't important in the grand scheme of things it's net profit over the long term that is. LIVE LONG AND PROSPER is the simply moto of that I guess.
I detect ambivalence and frustration. You have to decide which of the three kinds of people you want to be.
  1. Those that make things happen.
  2. Those that watch things happen.
  3. Those that wonder what happened.

I have my favorite motto pasted to the bezel of my monitor so that I can see it and be motivated by it constantly.

"If it is to be, it is up to me"
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Old Nov 5, 2010, 3:55pm   #18
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Re: Exiting a trade?

jd1888 started this thread I detect ambivalence and frustration.

Totally spot on Howard, thats exactly how I feel.

I know which one I want to be thats for sure. THE ONE THAT MAKES THINGS HAPPEN.

Its the getting that mindset and kepping it there where the problem lays.

That's a good motto to go with. I shall try and think about that and say it to myself at least once a day.

Its funny how we've sort of drifted of topic to the psychology of things but that just shows how the two are interlinked.

I think a lot about the psychological side of things and always try to keep a positive mindset because I have a theory that to attract what you want you have to be positive, but this can be hard sometimes when you staring at an open position going for/against you.

Because if you have a negative mindset then all get is s*it and bad results, which I'm sure a lot of people have experienced or can agree with.

Thanks to everyone how has contributed to the thread so far.

Last edited by jd1888; Nov 5, 2010 at 4:02pm.
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Old Nov 5, 2010, 4:03pm   #19
 
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Re: Exiting a trade?

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Originally Posted by jd1888 View Post
I detect ambivalence and frustration.

Totally spot on Howard, thats exactly how I feel.
It was relatively easy to detect as I've been there myself. I'm severely bi-polar. The ups were spectacular and the downs sucked. When I was down I would give up much of my hard earned gains. I never became a really successful trader until I got the right help.

"Better living through Chemistry" Those old enough will remember this tag line from a television commercial long ago and will laugh. The rest of you will just understand.
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Old Nov 5, 2010, 9:01pm   #20
 
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Re: Beanz Meanz Pips !

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Originally Posted by jd1888 View Post
Nice post.

The beans part f**kin hilarious. I also cook my beans in a pan but thats because I have no microwave, having said that though I belive a pan is better anyway for the reasons you've stated. LOL

On a serious note though I think you've hit the nail on the head it is more of an internal problem than signal for exit etc.

I'll try to answer the question random or not?

I think they have to be random in some sense, the fact that there is so many traders/institutions trading them they all can't be communicating with one another to say buy here sell here.

But on the other hand certain markets can be moved and manipulated by the big players which would make that market not quite so random.

So I guess my answer to the question shows why I p*ss about with my trade so much, INDECISION. Would you agree Spinola?

Cheers and yes I can see how confusion, indecision , unpredictable own actions may whack in if we lack a sure footing on how we wish to approach trading the market in the first place.

And if all our market exposure experience is formative of how we perceive them to be , then It is clear to me that left unguided, it is no wonder it can often take many months/years of time exposure to the market environment for an individual isolated trader to understand and develop his fixed internal outlooks confronting a fluid market.

So what I think should happen, is that a trader needs to know his self inside, as to how he must approach the market conditions outside of himself.

And this brings my thinking back to the question of

Do I need (for myself) to approach the markets based on my internal driver that I feel, know, am drawn to... etc that

a) The markets are random or

b) The markets are not random.


And this is just my own thoughts on it, but with myself I have always felt option b) . For someone else, to them, it could be option a. But I would want them to know whats right for themselves , that is where I would nudge someone to head towards, answering that one bloody question firstly.

As from that , I feel, it may help the individual with the development of the entries and exits executed in the market and those actions taken are more likely to be planned, controlled and understood by the individual making them.
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Old Nov 5, 2010, 11:26pm   #21
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Re: Exiting a trade?

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It was relatively easy to detect as I've been there myself. I'm severely bi-polar. The ups were spectacular and the downs sucked. When I was down I would give up much of my hard earned gains. I never became a really successful trader until I got the right help.

"Better living through Chemistry" Those old enough will remember this tag line from a television commercial long ago and will laugh. The rest of you will just understand.
It's a bad situation to be in isn't it? What help do you mean?
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