Article Avoid Stress when Managing Exits

[T2W Bot]

Traders spend most of their time researching setups for trade entry, using fundamental analysis, chart patterns, signals from technical indicators, or some combination of these.
Yes, no doubt about it, finding entries is vitally important, because the entry is the foundation upon which a trade is built. However, if finding good entries is the most difficult thing, finding good exits is the most emotionally challenging part of the trading process!
Winning or losing, deciding on the exact time to close your trade can drive you nuts.
Common exits occur when traders get stopped out at a stop loss level, close the trade into high volume spikes, or attain predefined targets.
All trades should have a stop loss in place. Some traders hold a mental stop, others place physical stops in the market. Initially the stop is set at some level representing the maximum risk the trader is willing to bear if the market turns against the trade. Later, if the trade moves favourably, stops can be...

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[deco101]

This is a forum thread for discussing the Knowledge Lab Article, "Avoid Stress when Managing Exits".

Good artice, I agrre that exits are more difficult than entries but most systems concentrate on good entries.

I just let the candlesticks do the talking and combine with a Average True Range Indication for my optimal exit, but again there is no one correct answer and I find I am continously refining my approach.

Being chained to the screen well that is part of the job I find in some ways, hence I bought a pair of 23inch mac screens I trade the 1 hour charts eventually ill move to daily charts then I can go play golf....

 

[EminiForecaster]

Didnt see it cover in the article but another good (or exceptable) way to exit and this works on any time frame, is what I call a time out stop. If you are trading say on a 1 minute bar bases and you enter at 10am and lets say you are in the money most of the day rule would say that if it has been more than say 60 bars (or 1 hour) since entry then exit this bar close. And also indicate that you cannot take the next trade in the same direction as the previous trade - this works better in non-trending markets like SP500.

Another tip you can use with a timed stop is only exit if its been more or equal N bars AND your openposition profit is greater than say $100 or 2sp500 points, then exit this bar close.

Once you are out let your system rules dictate to you what your next trade will be, sometimes in a flat market this can work pretty good especially with lower N bars to wait for.

 

[timsk]

Didnt see it cover in the article but another good (or exceptable) way to exit and this works on any time frame, is what I call a time out stop. If you are trading say on a 1 minute bar bases and you enter at 10am and lets say you are in the money most of the day rule would say that if it has been more than say 60 bars (or 1 hour) since entry then exit this bar close. And also indicate that you cannot take the next trade in the same direction as the previous trade - this works better in non-trending markets like SP500.

Hi Vadim,
Welcome to T2W.
I'm afraid I don't understand the logic behind your 'time out stop'. What's the significance of 60 minutes, as opposed to 5 minutes, 15 minutes or 47 minutes and 22 seconds? Also, you infer that the S&P500 doesn't trend. If you're trading a 1 minute timeframe, I'd say it trends most days. Last Friday is a particularly good example. Attached is 1 min' chart of SPY (which is a good proxy for the index). Of course, your definition of trend may be different to mine, but the first hour of trading looks pretty good to me. As it happens, your 60 min' time out stop would have worked very well here - perhaps you'd care to outline your thinking behind it?
Cheers,
Tim.

 

[EminiForecaster]

Hi Tim, based on the research over the years, intraday market tends to cycle in a little over an hour incraments, timed stop is design to no get stuck in flat markets but keep trading them and on trending days taking some profits, timed stop is a little know stratagy not used by many traders, you can optimize your hold time (how many bars you will be in a position) in your stratagy if you are using tools like TradeStation, if not you can view your past trades of you own system and see if having a timed stop would have helped.

PS Thanks for the welcome Time.

 

[Joey25]

Hi Tim, based on the research over the years, intraday market tends to cycle in a little over an hour incraments, timed stop is design to no get stuck in flat markets but keep trading them and on trending days taking some profits, timed stop is a little know stratagy not used by many traders, you can optimize your hold time (how many bars you will be in a position) in your stratagy if you are using tools like TradeStation, if not you can view your past trades of you own system and see if having a timed stop would have helped.

PS Thanks for the welcome Time.

Thanks for sharing this Emini - it looks like a very useful area to look into.

Joey.

 

[addy41]

Most of the trades that I enter are event driven so I usually have a date in mind for the exit when I enter. But even with that you do have to keep watch in case the market turns on you.

 

[foroom lluzers]

Another great article from a practical and real trader.

This is how I manage risk and trade with minimum stress.I use options and am prepared for the loss of premium with every trade I put on.Once I put on a trade , I have no emotions or stress to manage.

http://www.trade2win.com/boards/trading-systems/223496-trading-without-stop-loss-using-options.html

https://www.wired.com/2007/03/security-matters0322/

My mentality is if I lose I lose .fi

 

[tyhe]

Hi Tim, based on the research over the years, intraday market tends to cycle in a little over an hour incraments, timed stop is design to no get stuck in flat markets but keep trading them and on trending days taking some profits, timed stop is a little know stratagy not used by many traders, you can optimize your hold time (how many bars you will be in a position) in your stratagy if you are using tools like TradeStation, if not you can view your past trades of you own system and see if having a timed stop would have helped.

PS Thanks for the welcome Time.

Hey man so u have any recommendation for books or papers on short term cycles like this