How to exit a profitable trade

[Vaco]

Closing a loser seems simple enough, pick a level manage your size and away you go....but how do you exit the winners.

 

[price777999]

having the same problem me self ....... my plan now is dont touch the stop until about + 50 pips profit , then if price is at a trend line or horizontal support take profit. or if it looks like it could go some more just tighten the stop and let it run till + 100 pips .

check my thread http://www.trade2win.com/boards/forex-discussion/92216-audusd-trade.html

 

[oildaytrader]

Closing a loser seems simple enough, pick a level manage your size and away you go....but how do you exit the winners.

I have no knowledge of intraday day trading and stops.Exits on daily set and forget systems ,swing systems and trending systems vary depending on the system and instrument .Exiting when price stalls is often cutting your profits short and killing positive expectancy.A swing system on cable,backtested over 8 years, with no profit target produced 40 % more profit than a fixed target of 200 pips.The same system produced 10 % less profit on euro usd using same tests.The tests had 7 out of 14 exit criteria to be met for exiting.

It is a big subject give an answer on.

 

[Sang Froid]

I never thought I would get to the stage where I consistently need to worry about how to close out winning trades.

Anyhow, the dilema I face is with the use of trailing stops or moving my S/L up to a break even point. Sometimes they would have saved me. Yes sometimes my trades have been very profitable before the price turns takes out my S/L. However, price doesn't move in a straightline. I find whenever I use trailing stops or start messing about with my S/L it knackers my RR ratio up. More often than not the price will take out my adjusted stop or hit my trailing stop leaving me with breakeven or at best a small profit before going on to shoot past my original T/P. Yes it can save you from having a bigger loss but it also stops you from have bigger wins

 

[oildaytrader]

Set of rules to exit

1)stochastics indicator reversing on several time frames
2)price retreating
3)break of trendlines
4)positive expectancy target achieved
5)trend exhaustion
6)divergence indicators
7)fundamentals
8)trailing
9)trend reversal commenced

 

[shadowninja]

Closing a loser seems simple enough, pick a level manage your size and away you go....but how do you exit the winners.

When my profit has gone back into loss and spend the rest of the day berating myself at how much I could have won.

Ok, seriously, I trail stops but watch how price reacts at key levels to determine whether to bail or not.

 

[oildaytrader]

When my profit has gone back into loss and spend the rest of the day berating myself at how much I could have won.

Ok, seriously, I trail stops but watch how price reacts at key levels to determine whether to bail or not.

What is the success rate of exiting on such criteria 50 %, 70 %?

Just exit because the price stalls or fails to continue in the original direction?

What is your definition of "how price reacts?"

 

[Shanghai]

I scale out a proportion of my position using Keltner channels as a guide. I then run the last part of my position using an intraday chart (30 mins). Once the trend breaks on that chart then I am out of my last position. Its a compromise but then again many things in trading are. Its also fairly objective which means it can also be backtested. The other advantage is that the proportions of the trade to scale out can be adjusted easy depending on whether you want to trade more agressively or not.

 

[Pi3141]

For me, price tends slow and consolidate around the round numbers, so I observe how price reacts around these areas. If the momentum of the previous bars are strong then chances are I stay in the trade. If momentum is weak and the bars are getting shorter then ill exit at take my winnings. Again its watching how price reacts really.

Letting a winning trade turn into a losing trade is such a psychological blow, thats why I think its always best to take small profits even if it means exiting your position prematurely, because eventually you will hit a big winner and the smaller winners will help you as well.

 

[bedsit]

I prefer to exit 1/2 to cover the stop (free ride) and then put a trailing stop.

The other thing I may try is Wilder's Parabolic Stop And Reverse.

 

[Black Swan]

If trading forex on noisy time frames (1-15minutes) I would set and forget; 15-20 stop loss, move stop to lock in/protect 30-40 target profit, anything above that is honey on top.
On longer term TFs you get a much better/bigger window to control your exits using all the afore mentioned tools and discretionary skills. Lock in 50 pips, 70 pips 100 pips etc...

 

[Black Swan]

I prefer to exit 1/2 to cover the stop (free ride) and then put a trailing stop.

The other thing I may try is Wilder's Parabolic Stop And Reverse.

Some suggest that it's pointless unless you use bigger TFs (Wilder *invented* it for dailys only) and use the ADX/directional indicator to establish strength of trend (does trend exist on low TFs?). If you use it noise trading you may get your a55 whipsawed...

 

[leovirgo]

You need one more option - take profit at fixed multiple of initial risk.. such as 42pips profits on 21pips risk based on +2R exit. I look for S/R etc near +2R +3R +4R exits.

 

[wackypete2]

If trading forex on noisy time frames (1-15minutes) I would set and forget; 15-20 stop loss, move stop to lock in/protect 30-40 target profit, anything above that is honey on top.
On longer term TFs you get a much better/bigger window to control your exits using all the afore mentioned tools and discretionary skills. Lock in 50 pips, 70 pips 100 pips etc...

yes, good insight on that.

Peter

 

[oiltanker]

the strat should determine likely take profit e.g through RR or whatnot?

markets are not stable. new trades enter all the time changing the balance.

i find the desire to get every hindsight pip and doing the woulda shoulda coulda dance is just greed?

 

[N Rothschild]

odt what you doing in this thread, you have never had a profitable trade before

 

[oildaytrader]

odt what you doing in this thread, you have never had a profitable trade before

After the slagging of lipstick on a pig,you keep coming back for more, after threatening to remove posts like a 14 year old who couldn't take it.One more post of no substance and nothing of value to contribute on any subject.They should ban you for interrupting threads.

 

[Black Swan]

the strat should determine likely take profit e.g through RR or whatnot?

markets are not stable. new trades enter all the time changing the balance.

i find the desire to get every hindsight pip and doing the woulda shoulda coulda dance is just greed

Yep good point, happy with 75 even though you could have made 100? Too right. On lower TF's I'd often set limits for 30-35 pips, so what if it went on to 50+...15 pip stop, 30 limit. 9 trades; 3 wins, 3 B/E, 3 losses...kerching... Traders have to face up to 2 facts; you will always get losing trades and you'll never get you exits *right*...

 

[Vaco]

You need one more option - take profit at fixed multiple of initial risk.. such as 42pips profits on 21pips risk based on +2R exit. I look for S/R etc near +2R +3R +4R exits.

I suppose fixed target based on +2R would fall under option 1 for fixed target and s/r is option 2.

You can choose both in the poll.

 

[oildaytrader]

Yesterday I had crap day , I exited my positions early and closed 1,000 pips early.I have done this several times this year on my phantom automated system .I overrode the auto programs which close at the end of the day, positions were closed in the afternoon.

I had a profit but not what I should have had.This year it has cost me over 2,000 points by exiting early.

There is only one solution, shoot my self for interfering with my own systems.

Closing positions when market stalls at key levels is not a good idea.