Exit strategies

[madasafish]

I look for exits as follows:
when long: when the market becomes overbought and then STOPS being o/b.. usually because it falls. Using a 5 min chart , I would either stop there or at a R1/R2 level if it is hit at the end of a rally. imediately. You can always re-enter.
And vice versa for shorts..

 

[NickW]

Parabolic stop & reverse works well for automating trailing stops.

http://www.incrediblecharts.com/technical/parabolic_sar.htm

You need a charting package that supports it.

As I mentioned earlier, you could experiment by exiting in stages. E.g. cover 1 contract on a MA cross, another on a trailing stop, and the last one on gut feel as you near support/resistance. See what works for you.

Nick

 

[ivorm]

Hi Nick,

Thanks for the link. Parabolic SAR looks interesting. I will take a good look at it

Regards,

 

[CityTrader]

Guys, sorry , having been a market- maker for last 17 years, the market makers can NOT see the stops. SEAQ is a quote driven market- there is NO electronic order pad. For SETS- if you leave a stop with your broker, spread betting firm , whatever, they will watch the stop for you. Ocassionally, ( in fact RARELY) will they leave a stop with a market maker -rather they will watch the stop themselves. Generally, the only limits left with market makers by the brokers would be along the lines of " Show me the offer 10,000 of xyz plc at xp " ( or vie verse for a sell limit)
Certainly Royal Blue's Fidessa which is used by majority of market makers for SETS trading, does not have a stop loss facility, nor, would it ever be needed by market makers.

Hope this helps..