The exit of a trade: how? when? where?

[firewalker99]

Admitedly I'm still learning but I've found the following seems to work for me.

Resistance identified at $60.00
Entry at $60.02
Sell 50% at $60.10
Trail remainder at a .08

(the initial 50% sell off and the trailing amount change depending on the volatility of the stock)

To be honest though this is more for psychological reasons at the $60.10 point greed and fear start their war so I exit 50% confirming the trade as a winner (even if it falls back to entry and the trail triggers I'll still be up) and let the other 50% ride to satisfy my greedy impulses.

Care to give us a visual representation of your example (by preference with a chart of your favourite trading instrument)?

 

[firewalker99]

firewalker99

Like I said in my post, these are Hypethical numbers for scaling in and scaling out.

I made these numbers up on of thin air. You can define any parameters you like. I am only giving you an example of how to scale in and out. Just an idea for someone to work on.

Okay no problem. I thought it was a real life example. One I definitely wouldn't like to trade that way. But yes, I know what you mean. Nevertheless, I've yet to see anything that convinces me that scaling in yields more profits than a single entry in daytrading (so you're not allowed to hold overnight).

 

[laptop1]

Okay no problem. I thought it was a real life example. One I definitely wouldn't like to trade that way. But yes, I know what you mean. Nevertheless, I've yet to see anything that convinces me that scaling in yields more profits than a single entry in daytrading (so you're not allowed to hold overnight).

If you don't scale in or out, do you work on the basis of a 1 to 3 ratio? or a 1 to 2 ratio? or even a 1 to 1 ratio?

 

[firewalker99]

If you don't scale in or out, do you work on the basis of a 1 to 3 ratio? or a 1 to 2 ratio? or even a 1 to 1 ratio?

I do scale out incidentally, but my first target is usually already 2 times the stop size. The second target depends on the trade, but can be up to 5 times as big (although I'm quite lucky to call such a winner). The problem is that although most of my trades hit their first target (after which I move my stop to breakeven), letting the second run to the appropriate price level is not so easy.

Price seems to hunt back towards my stop in like 50% of the cases after target 1 is hit... :| So the question is should I exit completely (and miss out on those rare occasions where price travels very far and I take huge profits compared to a "normal" trade), or should I leave half a position on.

Perhaps leaving 1/3 or 1/4 open might be the best way to lock in most of the profits and leave open the possibility for price to trend in the right direction for a sustained amount of time.

 

[laptop1]

I do scale out incidentally, but my first target is usually already 2 times the stop size. The second target depends on the trade, but can be up to 5 times as big (although I'm quite lucky to call such a winner). The problem is that although most of my trades hit their first target (after which I move my stop to breakeven), letting the second run to the appropriate price level is not so easy.

Price seems to hunt back towards my stop in like 50% of the cases after target 1 is hit... :| So the question is should I exit completely (and miss out on those rare occasions where price travels very far and I take huge profits compared to a "normal" trade), or should I leave half a position on.

Perhaps leaving 1/3 or 1/4 open might be the best way to lock in most of the profits and leave open the possibility for price to trend in the right direction for a sustained amount of time.

Can I ask what market you trade? and what stop you use in point terms, also you first target and your final target, maybe I can help you. If you want you can PM me or post it on here.

 

[barjon]

...................Price seems to hunt back towards my stop in like 50% of the cases after target 1 is hit... :| So the question is should I exit completely (and miss out on those rare occasions where price travels very far and I take huge profits compared to a "normal" trade), or should I leave half a position on.

Perhaps leaving 1/3 or 1/4 open might be the best way to lock in most of the profits and leave open the possibility for price to trend in the right direction for a sustained amount of time....................

hi, fire

......or exit all and establish re-entry criteria if possible.

good trading

jon

 

[firewalker99]

Can I ask what market you trade? and what stop you use in point terms, also you first target and your final target, maybe I can help you. If you want you can PM me or post it on here.

Hi laptop, I trade primarily DAX and DOW.
The examples I've been talking about in this thread have been about DOW primarily.

Don't know if you've been following the DOW thread lately, I've posted a lot of live trades there and (especially lately) I've noticed a very clear pattern that a lot of trades reach target 1 rather quickly, but then fade or return to my stop. In case you are online right now, I have a long from 13572 (Sep futures) from about 1 hour ago that I just exited at 30 points. Normally I would leave half of the position open and exit when the market gives me a clear signal the move has exhausted. The stop is moved to breakeven.

Feel free to comment or advise. Any suggestions are welcome (from everybody that is)

 

[firewalker99]

hi, fire

......or exit all and establish re-entry criteria if possible.

good trading

jon

I know... there's always the possibility of re-entry. But IF the trade goes straightforward in the right direction and does not return, I will be gutted for exiting completely. If it does not (see example) and I re-enter (which I am reconsidering as we speak right now) but I get stopped out I will have made less than half as much compared to a single complete exit.

Difficult exercise in finding the right equilibrium that's for sure...

 

[barjon]

I know... there's always the possibility of re-entry. But IF the trade goes straightforward in the right direction and does not return, I will be gutted for exiting completely. If it does not (see example) and I re-enter (which I am reconsidering as we speak right now) but I get stopped out I will have made less than half as much compared to a single complete exit.

Difficult exercise in finding the right equilibrium that's for sure...

fire


...that's trading :cheesy:

funnily enough, much as i hate making a loss, i never get so hung up over missing further gains after exit - just me i 'spose.

so long as your bottom line is sound in relation to your target exit point and your account is growing according to planned target, then missed opportunity is almost incidental. it's just another "could've" amongst many others.

good trading

jon

 

[firewalker99]

fire


...that's trading :cheesy:

funnily enough, much as i hate making a loss, i never get so hung up over missing further gains after exit - just me i 'spose.

so long as your bottom line is sound in relation to your target exit point and your account is growing according to planned target, then missed opportunity is almost incidental. it's just another "could've" amongst many others.

good trading

jon

Yes, perhaps I am trying to squeeze out too much. But my win ratio is only about 50-60% (last month on DOW has been unusually good - more like 75%) so basically I really need to let those profits run. I still feel I'm either giving back points or not letting profits run far enough.

As for this particular trade, DOW is now moving lower and those 30 points were about as much as there was to gain from that trade. But by giving the trade the possibility to develop itself into something more (leaving open half of the position) I'm inevitably exposing myself to the fact that price aims back at my stop, which I did in this example.

I guess most people would say "give it a rest". And like you say it can get an obsession if you start to focus on that "could have been" profits. Perhaps it's just me... I always think there's room for improvement.

 

[firewalker99]

where to exit (live)?

I shorted from 13555... contemplating the "single entry, single exit" I took profits at my first target (+30 points) and exited completely. Normally I would leave half of my position on. Suppose I was still in, I would probably have exited at the 7k+ volume that forms a candle with very long wick.

Now suppose I didn't take profits at my first target then I would have exited both halves at about 50 points each...

I'd love to hear how other members would treat this situation. As I'm sure the short signal here is something other's will have picked up too... (it's a clear springboard for those interested).

 

[barjon]

fire

I generally have an exit order in for first target, but sometimes I do it myself when I'm paying proper attention. Occasionally, if I've been diverted (modding or something ), the price has gone past target and I just lift stop to target level and then trail it if price keeps going.

It occurs to me that you might experiment with that approach. You seem to have a numerical target, so make make it 35 (32.5 or whatever) and stick an exit stop in at 30 (27.5) when it gets there. That'd at least keep you in the high momentum moves.

good trading

jon

 

[firewalker99]

fire

I generally have an exit order in for first target, but sometimes I do it myself when I'm paying proper attention. Occasionally, if I've been diverted (modding or something ), the price has gone past target and I just lift stop to target level and then trail it if price keeps going.

It occurs to me that you might experiment with that approach. You seem to have a numerical target, so make make it 35 (32.5 or whatever) and stick an exit stop in at 30 (27.5) when it gets there. That'd at least keep you in the high momentum moves.

good trading

jon

That's a good suggestion. Switch to trailing stop after price hits target 1 (T1)... hmm might be somewhat too close though. However, my T1 is often a point where price decides to reverse, or at least retrace a part of the previous move. I could do some backtesting on moving the stop closer, instead of breakeven...

Thanks for all your suggestions. I have my work cut out
The other day I had a sell signal on FTSE (around 6725) and I took about 20 points. If that had been an overnight trade I could've been almost 200 instead. But that's a whole different matter. And I wouldn't sleep well at night!

 

[barjon]

..................... And I wouldn't sleep well at night! .....................

each to his own the morning gap accounts for much of the gravy on my plate

cheers

jon

 

[Splitlink]

Talking of gravy for breakfast, what did you get for Monday morning?

Split

 

[barjon]

Talking of gravy for breakfast, what did you get for Monday morning?

Split

split

good for av and pru shorts, not so good for bt long and no position on ftse to worry about since long didn't trigger on friday.

good trading

jon

 

[Splitlink]

At present I made 12 on a Ftse short and and bought into Ftse long for 6527. I'm hoping that what I have will turn into a swing trade, but don't think that I would have the nerve to hold.

Split

 

[barjon]

..................bought into Ftse long for 6527.................

Split

nice call, split - but to get back to the topic of the thread when are you going to exit it and why? :cheesy:

good trading

jon

 

[Splitlink]

Hi Jon,

I'm enclosing a 30' chart.

C is what I consider to be the downtrend. Somewhere in here I'm expecting a turn.

I'm trying for a level above B, which I consider to be a resistance point.

If the index returns to A and does not show much interest in returning above it, I will probably sell.

On top of all this, I go to work at 1330 UK and will have to come to another decision on what to do, if things are going well at that time.

Split

 

[barjon]

split

on the basis of your expectation we seem well into your channel now and near point B - seems a reasonable target point to take half and lift stop on the rest to just below bottom channel line or A ?

good trading