Best Exit Strategies for Forex market ?

[NVP]

To clarify, the filter rule exit is as follows:

Example Long

(The defintion of a "local maximum" I use here is a price surrounded by lower prices to the left and to the right).

Buy at 100 on day 1
Day 2: price 101
Day 3: price 102
Day 4: price 101 ------- at this point a local maximum has been formed at 102

The filter rule exit is then a % fall from 102, so if we use 5% it needs to fall from 102 to 96.9 before the exit signal is triggered.

If a new local maximum is formed that is higher than 102 before 96.9 is hit then a 5% fall from this new higher-high is required.

theres a FIbo idea in here somewhere ?

N

 

[Adamus]

The price action crowd have two exit approaches that I have found so far:

- put the first stop just below the signal bar of entry, then move it up to just below the entry bar when the market is clear above that bar, then move it up to break-even at the next bar which closes clear above that. I don't like this one so much because I think it's less performant on currencies, but most price action people I speak to trade the S&P or crude.

- alternatively, if you're in, you exit when price action starts to look flakey - in other words totally subjective and utterly dependent on what kind of price action you're keen on. while they seem to look for at least 3 or 4 price action reasons to enter, it seems they only need 1 price action reason to bail out.

 

[Billy Gates]

I have also found very little regarding exit strategies. It is the final piece of the puzzle for me. I find that 95% of my trades go into profit and I should close them, but not having a clearly defined exit still holds me back. I am looking for something that is very objective, no discretion involved what soever and also something reliant on the the market trend and technicals. There are many but nothing that I am happy with yet.

It is amazing how wqithout this one piece most of the winners turn into losers asIsit there and watch my profits dissapear. As they dissapear, the old psycholgy kicks in..such aswaiting for the market to come back.

I think exits are by far the most important part. If you have this nailed then the rest will take care of itself.

 

[Vorbis]

I am looking for something that is very objective, no discretion involved what soever and also something reliant on the the market trend and technicals. There are many but nothing that I am happy with yet.

Why not make a list of half a dozen you think are promising and test them? Then when you have a clear winning performer, adopt it and stick with it.

I think exits are by far the most important part. If you have this nailed then the rest will take care of itself.

The exit is irrelevant if you don't get the entry right first! Any resulting profit is defined by the positive difference between the two, so aren't they by definition equally important?

 

[Billy Gates]

The exit is irrelevant if you don't get the entry right first! Any resulting profit is defined by the positive difference between the two, so aren't they by definition equally important?

Yes I agree, but I think most people will enter a trade more easily than they will exit one. Many enter either on a whim, or an idea or just on the basis of greed or missing out. But when you get one right, you will start to focus more on the other anyway.

There is more involved with the exit in my opinion and that is why most traders struggle with this and profitability more.

 

[NVP]

Why not make a list of half a dozen you think are promising and test them? Then when you have a clear winning performer, adopt it and stick with it.



The exit is irrelevant if you don't get the entry right first! Any resulting profit is defined by the positive difference between the two, so aren't they by definition equally important?

hey V

I see your point - but lets be honest ..........with some decent research and common sense I think that most people can get to a pretty robust set of entry Rules........even if it is just enter on a standard MA crossover signalling

I think the rules and issues surrounding the exit are probably much more subjective based for most and therefore create the real problems for delivering consistent profitable trading

if you consider that you expect your entry system will give you say an anticipated 1:1 return most of the time then its the exit strategy that can get you the extra mileage and returns (or not)

purely mechanical Exit rules verses instinct and experience is an interesting discussion point

N

 

[NVP]

hey all

I wanted to rejuvinate this Thread as after being lucky enought to talk to a lot of good traders in the last few weeks - most agree that Exit strategies are very very important and what sort the professionals from the rest

c'mon experienced traders .......have a look through the offerings here and add any thoughts please

Hey - The newbies might even read it instead of the next "holy grail" Entry System thread !

N

 

[NVP]

just to summarise most things mentioned so far


hitting Key support and resistance levels
hitting Set Targets (pips,ATR , % range, etc etc)
indicator crossovers / activation (MA's or whatever floats your boat)
Candlestick / Price action signals
Market News !!
correlation / signals from other Markets
probablistic models

Scaling in and out are favourites with the experts here (ie splitting your trade down into smaller chunks and using different Exit strategies with each part).....this way you are not "all or nothing" and can allocate funds to B/E , Targets and even a little to running the trade if it takes off with training stops etc etc

N

 

[NVP]

interesting article (thanks Lance)

Working on Exit Skills | Adam Grimes

 

[arbus]

This wont work with every system, but the optimal exit for many systems is the new entry point.
That is assuming you can pick the tops and bottoms more often then not.

If you are exit before the price moves in the opposite direction you are not taking full potential of the movement.

 

[NVP]

This wont work with every system, but the optimal exit for many systems is the new entry point.
That is assuming you can pick the tops and bottoms more often then not.

If you are exit before the price moves in the opposite direction you are not taking full potential of the movement.

exit = next entry point ?

hmmm thats an interesting point A .....

not sure I agree in total.............my exits are generally as the trade is starting to lose momentum...........my entries are no where near this point in the game

N

 

[FringFX]

This wont work with every system, but the optimal exit for many systems is the new entry point

which systems are these?
in some cases, if you exit at an area where you are supposed to re-enter, you would've left a lot of pips on the table.

 

[15 min tlb]

exit = next entry point ?

hmmm thats an interesting point A .....

not sure I agree in total.............my exits are generally as the trade is starting to lose momentum...........my entries are no where near this point in the game

N

What was the conclusion after 75 posts ?

What are the best exit methods for each type of trading , and how do you exit without cutting profits?

 

[15 min tlb]

If you are looking at 1h or higher and you are in profit then a good exit would be a break of the 20ma. I like the 20ma because it allows for some breathing room and gives nice re-entry signals if price breaks back in your favor.

Peter

So what happened to your 10 pip exit?

 

[15 min tlb]

Very interesting. I do bollinger band set ups. It's a pretty powerful indicator. If you are trading with the trend you can use the opposite b band as a likely stop. If I'm in decent profit I'll move the stop to the 20ma and use that as a trailing stop. This will keep your losses small during ranging markets but will give huge profits during trending action.

BTW, I was reading your correlation thread and downloaded the FXCORRIE ea. I'm going to play with it for a bit.

Peter

Good method

 

[15 min tlb]

Round numbers and s/r levels, prior highs and lows.

Or

Try a two candle trail, 1 candle with very sharp moves, tighten up sharply if you get a strong reversal signal. I do everything on the close.

Good method

 

[15 min tlb]

http://www.trade2win.com/boards/forex/162600-box-breakout-pro-scalping-73.html#post2043510

 

[wackypete2]

So what happened to your 10 pip exit?

The exit method in the post that you were responding to was for 1h or higher time frame which I admit I do not trade that time frame too often. Personally, I do not like that same method when I'm trading lower time frames because there's a higher tendency to whipsaw. Generally I trade the 5m chart and take 10-20 pip targets.

Peter

 

[barjon]

.................. and take 10-20 pip targets............

Peter

I'm sort of with that since my exits are geared from what I reckon I need to take from a trade to keep my account ticking along. I'm not really interested in getting the maximum from an individual trade and not much bothered if the things shoots along further when I'm gone.

I know (statistical expectation, anyway) that if I take 1.5:1 from trades then my account will move along quite healthily so I will protect that level where I can, although I target higher since I won't take a trade unless there's the potential of more than 1.5:1 in it by my reckoning. I'm pretty rigid about exiting to target if that target level is reached - I don't like giving anything back and if the thing goes on I'll most likely get another set-up anyway.

 

[15 min tlb]

I'm sort of with that since my exits are geared from what I reckon I need to take from a trade to keep my account ticking along. I'm not really interested in getting the maximum from an individual trade and not much bothered if the things shoots along further when I'm gone.

I know (statistical expectation, anyway) that if I take 1.5:1 from trades then my account will move along quite healthily so I will protect that level where I can, although I target higher since I won't take a trade unless there's the potential of more than 1.5:1 in it by my reckoning. I'm pretty rigid about exiting to target if that target level is reached - I don't like giving anything back and if the thing goes on I'll most likely get another set-up anyway.

My idea of exits is based on "running your profits ", until the balance of the power between bulls and bears change.Don't exit until this balance has changed.

If the entry is wrong or not not good , cut losses fast and exit quickly.Exits based on keeping account balances ticking , are not technical exits and should be avoided.These exits are more to do with greed and fear of keeping cash and protecting it.

There is random distribution of targets and losses , one can not place targets based on risk reward , but what the market will give .Traders have to look at what the market is willing to travel on that particular entry.The market does not do what the individual likes or expects , it is the individual who has to accept what the market is willing to give on that particular trade.The market does not work to individual's expectations.