Exit Stratagy

My exit stratagy pretty much resembles that of the American lead invasion of Iraq…… I don’t have one!

I’m am finding this by far the hardest part of my trading career so far.

Would like to hear what other people use as exit stratagies, indicators? Time? Price action?

first we need your trading style and timeframe..scalping, swing etc?

Day trading, some held overnight, 15m

I say work out some target to take profit, take some of the table at first target and some more at the second target. leave a little to be taken out by a trailling stop loss. If second target can not be reached close the rest out at brake even if it comes to that.

take your entry strategy and bang a mirror in front of it :-S

Me too, ffsear.

I am experimenting with extreme points on indicators.
For example, only take exit when CCI(21) exceeds 200 or -200 and pullsback. (ideally on CCI closing below 100 (after exceeding 200) or above -100 (after exceeding -200) ).

Another test I am running is MACD (currently only with default settings) when MACD exceeds 0.002 or -0.002 and pullsback. I am just establishing whether the principle is valid before looking at tweaking settings away from default.

NB: ignore extreme readings if previous action was rangebound, as the extreme readings will not be "true".

Currently under test, so can't give you a definitive answer, just something to check out for yourself, esp if you use alerts rather than sitting in front of screen all day. The alerts give you a reason to look at potential exit points.

EDIT: I replied becasue you say you trade the 15-mins, which is what I have moved to recently. Much better moves, and less intra-day hassle.

EDIT2: just noticed my first MACD example isnt a good one. the correct position for the first aqua block should be a few bars to the right, meaning it missed the extreme, but still a decent exit I think.

ffsear said:

My exit stratagy pretty much resembles that of the American lead invasion of Iraq…… I don’t have one!

I’m am finding this by far the hardest part of my trading career so far.

Would like to hear what other people use as exit stratagies, indicators? Time? Price action?

Click to expand...

A very simple but effective way I find, if I'm not using a set pip exit, then for me when using a 30 min chart, I run 2 tema's 40 and 12, both should match when taking the trade, when the tema 12 changes whilst the t40 continues in the trade direction, often represents a good point to exit, as the price tends to consolidate, its not often wrong.

ffsear said:

Day trading, some held overnight, 15m

Click to expand...

Some call it swing trading

About exit strategy:

Again we face a more psychological issue than technical. I was like those americans invading far lands... no plan in advance to retreat.

In my opinion, the exit point could be by stoploss (things were bad) or takeprofit (things worked fine).

But this two situations are only one actually.

I would prefer avoid fixed stoploss or target points now. I prefer to close my position(don't matter wether winner/loser) as soon as the market begins to do something against my initial plan.

I don't mean to close when price come against my entry price. It is not about my position. It is about my plan.

If price go against my position but not against my plan yet, I'll keep it open.
If market begins to behave naughty (or evil) and goes against my initial plan, I'll close inmediately.

When I say "my plan" I mean "The reason why I open the position"
That is the key. I need a reason to open.

Reason to close is that reason to open is not valid any longer.

Do you have a clear, sharp and well definite reason to enter the market?
Then just close when it proves to be wrong.

If you don't have such a reason... then, why did you open the position?

Hello Ffsear,

There is no simple answer to your question. At any given time, I have 3-5 possible exit strategies set up in advance for the same trade. Occasionally if the trade develops in a way not anticipated, I will abandon these and go to a completely different exit strategy. The strategy I use depends on what part of the trade I am in, timeframe the trade is managed on (this may be different from the entry timeframe), volatility, type of move I am trying to catch, and my trading plan. Different issues and timeframes within the same issue may have different personalities, requiring them to be managed a bit differently. Each phase of the trade will also behave differently requiring different management techniques. I would review the major exit strategies out there then experiment with each in accordance with your trading plan. You will discover what strategies work best for your plan in a given situation.

In the same way that you have a stoploss strategy to protect against a "wrong" entry, so it is useful to have a re-entry strategy to protect against a "wrong" exit.

good trading

jon

Assuming we're talking about a long position (reverse everything for a short position), I think you have to decided when you enter on whether you're buying in near the top of a range (or channel) or when it's testing resistance (either previous highs or lows from a while ago, ie support becomes resistance). These would give you a very small reward and a greater chance of the price moving against you. It's these areas that you should be considering exiting or at least taking some profit. Also knowing the typical movement for a day is useful. I mean, putting a target of 300 pips when the ATR is just 150 can be wishful thinking if you're only holding overnight.

I think that makes sense. I ought to be going to bed!