I was reading the CT manual thread on this website and a common theme seemed to be that it provides a good entry point but not so good exit point...........i find this a bit confusing since i have always thought that decisions about the exit point r totally down to the individual trader not the system implying that a good system should basically provide a good entry point............I hope someone would enlighten me , thanks
Grey1
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grub,
Exit is the most difficult issue in trading ..
one can exit based on the following techniques
1) Money management
2) technical,
3) Statistical
The external random comets from outside such as ANTRAX warning , SEP11, ...(upgrades,takeovers news and stuff like that are already in the price .. ) makes EXIT an event driven subject which will override both above techniques..
I have always been a poor exit man, and have always taken profit far too early.
Perhaps other traders can shed light on this subject
Exit is the most difficult issue in trading ..
one can exit based on the following techniques
1) Money management
2) technical,
3) Statistical
The external random comets from outside such as ANTRAX warning , SEP11, ...(upgrades,takeovers news and stuff like that are already in the price .. ) makes EXIT an event driven subject which will override both above techniques..
I have always been a poor exit man, and have always taken profit far too early.
Perhaps other traders can shed light on this subject
Glenn
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Exit/Entry etc are also being discussed in First Steps today.
www.trade2win.co.uk/boards/showthread.php?s=&postid=48600#post48600
Glenn
www.trade2win.co.uk/boards/showthread.php?s=&postid=48600#post48600
Glenn
theknifemac
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grubs50 said:
In my opinion the quote above sums up the problem with many systems / literature - there is little discussion about the exit to use and 95% of the effort is concentrated on the entry. Am currently reading Sweeney's Campaign Trading, while dull this does have some interesting thoughts on Max Adverse Excursion and Min Favourable Excursion for setting stops.
Cheers
Mac
fudgestain
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Entry: if you have not done your homework extensively so that you are entering via set-up circumstances giving a high probability outcome, how can you plan or intend to make good exits?
Summary: if in the first place you don't whether you are on your a*** or your elbow when the market has moved for or against you, you can't have satisfactory exits .. or consistently satisfactory exits. Period.
Summary: if in the first place you don't whether you are on your a*** or your elbow when the market has moved for or against you, you can't have satisfactory exits .. or consistently satisfactory exits. Period.
Grey1
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theknifemac,
I have looked into Max Adverse excursion , maximum fav. Excursion as well other tools such as efficiency analysis as part of my research project around 1999 ish , to add or close positions in a way not to miss the meat in the trend.. ( assuming the trend lasted long enough to be profitable)....Ihowever had a little success to come up with a conclusive result to make the whole exit strategy worth while even though on back tested result I did come up with some fascinating results..In search of perfect exit , I ended up giving back the original profit I made because of my well calculated entry. I now strongly feel, EXIT is the most difficult part of trading and is constantly influenced by random forces from outside till the market is closed and one can't see the EXIT point while in a trade.. Inmy previous posts on risk analysis i have used Monte carlo simulations to show a minimum reward/risk of 3 is a good exit point ( with low edge systems) but as I said that is only based on theoretical bases than practical and real time trading ..
Math is good but not sure if the current level of Maths can model the social systems such as Stock market..
I have looked into Max Adverse excursion , maximum fav. Excursion as well other tools such as efficiency analysis as part of my research project around 1999 ish , to add or close positions in a way not to miss the meat in the trend.. ( assuming the trend lasted long enough to be profitable)....Ihowever had a little success to come up with a conclusive result to make the whole exit strategy worth while even though on back tested result I did come up with some fascinating results..In search of perfect exit , I ended up giving back the original profit I made because of my well calculated entry. I now strongly feel, EXIT is the most difficult part of trading and is constantly influenced by random forces from outside till the market is closed and one can't see the EXIT point while in a trade.. Inmy previous posts on risk analysis i have used Monte carlo simulations to show a minimum reward/risk of 3 is a good exit point ( with low edge systems) but as I said that is only based on theoretical bases than practical and real time trading ..
Math is good but not sure if the current level of Maths can model the social systems such as Stock market..
theknifemac
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Grey1
Some interesting points there. I liked the ideas proposed by Sweeney, but as I am interested in trading stocks think it would be even more difficult to apply as would need to decide all these things on a stock by stock level. I can imagine what you meant about getting fascinating but ultimately useless results from your research.
I am about to embark on my own research program. I have been reading many financial books and been working on my infrastructure for some time. The Sweeney book is one I have meant to read for a while and as is so typical after the build up it did disappoint me somewhat.
While taking this thread off topic, lets go completely AWOL. I've also been following your posts on the trading for a living board re VWAP. In my day job, VWAP is often the target my traders want to achieve as their portfolio benchmark and in the past I have written a system to automatically trade a portfolio in line with VWAP. From what I can tell, you are using VWAP as an indication of almost fair value for the stock intra day ? Or am I missing the point.
Cheers
Mac
PS If this question causes aggro I can repost or move it to the relevant board, but its been a long day in a long week and I've just been told I am in NY next week so I really can't be bothered right now.
Some interesting points there. I liked the ideas proposed by Sweeney, but as I am interested in trading stocks think it would be even more difficult to apply as would need to decide all these things on a stock by stock level. I can imagine what you meant about getting fascinating but ultimately useless results from your research.
I am about to embark on my own research program. I have been reading many financial books and been working on my infrastructure for some time. The Sweeney book is one I have meant to read for a while and as is so typical after the build up it did disappoint me somewhat.
While taking this thread off topic, lets go completely AWOL. I've also been following your posts on the trading for a living board re VWAP. In my day job, VWAP is often the target my traders want to achieve as their portfolio benchmark and in the past I have written a system to automatically trade a portfolio in line with VWAP. From what I can tell, you are using VWAP as an indication of almost fair value for the stock intra day ? Or am I missing the point.
Cheers
Mac
PS If this question causes aggro I can repost or move it to the relevant board, but its been a long day in a long week and I've just been told I am in NY next week so I really can't be bothered right now.
Grey1
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The knifemac,
VWAP is the price given by average trader on any given day. This is the bench market for my risk analysis.. During every trading day my scanner calculates how far a certain stock is away from its vwap and if the deviation exceeds than that of 2SD.. If it idid exceed and the market was bullish then I would leave that stock alone ( too much selling pressure ) how ever if the stock started bouncing off of 2SD support line then statistically there is a 95% chance of reversal to its vwap ) ..
In 2001 I got involved in VWAP research with another good friend of mine on another BB called Technical trader but we did not use the whole concept correctly which as a result I lost all interest in such a system . Now adays VWAP trading is the core of my entry and as a result I have not had many losses..
I only use price and volume action in multiple time frames ( 30 tick and 1 minutes ) hand in hand with VWAP concept with no reference to any other TA tools..
VWAP is the price given by average trader on any given day. This is the bench market for my risk analysis.. During every trading day my scanner calculates how far a certain stock is away from its vwap and if the deviation exceeds than that of 2SD.. If it idid exceed and the market was bullish then I would leave that stock alone ( too much selling pressure ) how ever if the stock started bouncing off of 2SD support line then statistically there is a 95% chance of reversal to its vwap ) ..
In 2001 I got involved in VWAP research with another good friend of mine on another BB called Technical trader but we did not use the whole concept correctly which as a result I lost all interest in such a system . Now adays VWAP trading is the core of my entry and as a result I have not had many losses..
I only use price and volume action in multiple time frames ( 30 tick and 1 minutes ) hand in hand with VWAP concept with no reference to any other TA tools..
theknifemac
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Grey1
OK this is making more sense - you are comparing a stocks current price to VWAP, but how are you working out your standard deviation figure, are you doing some sampling during the day or using VWAP figures from previous days ? Ooops have reread the last part of your post again and see the answer to my question. You must be very dependent on a good tick by tick feed.
Sorry if I am prying too much into your method, but would love to know some more without you revealing the family silver. Now I think about this more, I want to study how intra day VWAP behaves against the market prices, so need to fire up my Bloomy tomorrow I think.
Mac
OK this is making more sense - you are comparing a stocks current price to VWAP, but how are you working out your standard deviation figure, are you doing some sampling during the day or using VWAP figures from previous days ? Ooops have reread the last part of your post again and see the answer to my question. You must be very dependent on a good tick by tick feed.
Sorry if I am prying too much into your method, but would love to know some more without you revealing the family silver. Now I think about this more, I want to study how intra day VWAP behaves against the market prices, so need to fire up my Bloomy tomorrow I think.
Mac
Look at my thread on
www.moneyam.com
the dow index thread
all you ideas and posts are welcome
my stop loss ideas and £/pt is as flws:
(capital x 5%) divided by stop pts = £stake
rgds
zarif
www.moneyam.com
the dow index thread
all you ideas and posts are welcome
my stop loss ideas and £/pt is as flws:
(capital x 5%) divided by stop pts = £stake
rgds
zarif
fudgestain
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"This is based on a good entry obviously!! . I have noticed that this is possible with indices esp the Dow if u actually get to 'character' of d index." Grubs50
You've crossed on to the trail here.
Exit: assuming you know enough about your market, targeted profit-taking can be nicely deployed along with the trailing stop you suggest.
I don't keep such stops close behind the price if intending to catch a higher exit number.. could take me out too soon. Also I may instead be using an alert as a stopping out reminder so that my stop is not pre-entered and can't be hunted down by the broker.
You've crossed on to the trail here.
Exit: assuming you know enough about your market, targeted profit-taking can be nicely deployed along with the trailing stop you suggest.
I don't keep such stops close behind the price if intending to catch a higher exit number.. could take me out too soon. Also I may instead be using an alert as a stopping out reminder so that my stop is not pre-entered and can't be hunted down by the broker.
