Trading and Exits

[Citizen2007]

Hi,

I have been trading Forex for some time now and have a very good understanding of the markets. I am at the stage where i can determine market direction quite accurately. I can also determine very good support and resistance levels. But i am struggling on only one point.

I can enter a trade that can be profitable 90% of the time. I am however struggling with finding a suitable exit point or signal/indicator. I have tried stochastics and RSI but am not quite happy with the outcome. I am struggling especially with the smaller trades where the market moves about 40 pips with a potential of about 25 pips.

Today all the trades that i entered had a potential of about 140 pips on cable, but i just could not find a suitable exit point.

If anybody has any ideas or can help with an exit using multiple timeframes i would be grateful.

Also any excel programmers out there? I have an API developed that imports data from esignal into a spreadsheet but am looking for a programmer to help with programming.

Thanking you in advance for any assistance.

 

[fibonelli]

Why don't you use a trailing stop loss?

 

[kako]

I can enter a trade that can be profitable 90% of the time

On what conditions(S/L, T/P) you got that number? did you exactly backtest or this is only a sense or maybe what you may see on the chart? Things are quite different as they come from chart(seeing) on paper and quite more different when they go from papers on live trading. hehe.

I'm a forex trader too, I have two comments for above post:
1) There is no such thing in the world as 90% probability of success(it doesn't exist, no matter what) in any trading system. except the ones with a S/L of 500 pips and a T/P of about covering the spread...

2) for better exits I suggest to look on lower timeframes, say you trade on H1 you may look on M15's High and lows. It is quite good to have an oscilator on this lower TF chart and exit most of the trade when it is O/B or O/S in M15. or merely trail your stop(manually) with lower TF's high and lows.

My Regards
...........................
Kako

 

[Citizen2007]

I'm a forex trader too, I have two comments for above post:
1) There is no such thing in the world as 90% probability of success(it doesn't exist, no matter what) in any trading system. except the ones with a S/L of 500 pips and a T/P of about covering the spread...


...........................
Kako

Thank you for your reply. You seem to say what a lot of people say. But i totally disagree. You may have a different way of looking at the markets and 90% may not be real for you, but believe me it does exist and i am not the only one.

I am sure there are traders on here that already achieve this. I have no idea of your trading style so cannot comment too much. Most people just follow a strategy that will allow you to capture a certain phase or conditions within the market. Most cannot understand or work outside these parameters. A true understanding of the markets and their structure allows you to understand price movement, giving you the freedom to choose your trades. I enter these trades everyday live, all profitable but loose a lot of points by not having a clearer exit.

Many people believe that markets are random , I firmly believe they are not, there is too much money at stake for things to be left to chance. That is not to say that they are manipulated, just orderly.

500 pips s/l. You must be kidding. That sort of move probably has several opportunities in it. My stop losses are no more than 40 pips, absolute maximum. I do use multiple timeframes eg. trade of larger ones and use smaller ones for a close up.

Thank you

 

[Citizen2007]

Hi Fibonelli,

I find that i lose too many points on a trailing stop. It would have to be maybe 15/20 pips if you take into account the volatility of say the one minute chart.

Thank you

 

[jacinto]

i guess the answer depends on the time frame you use to trade and the expected time you hold the trade for.

1) as a first target the average "period" range (if it is a day, then a day, etc...) if it goes beyond that, a stop at that level ensures you get the average range (which is a very good performance by the way)

2) if you use patterns, then measured moves are the answer

3) if you are so good for seeing support-resistance, then if you are short, your targets should be support and if broken, stops to above broken support in case support doesnt become resistance

4) previous swing hi-lo are game or price dictated suppor resistance zones and thus targets too.

that is what comes from the back of my mind

 

[Citizen2007]

i guess the answer depends on the time frame you use to trade and the expected time you hold the trade for.

1) as a first target the average "period" range (if it is a day, then a day, etc...) if it goes beyond that, a stop at that level ensures you get the average range (which is a very good performance by the way)

2) if you use patterns, then measured moves are the answer

3) if you are so good for seeing support-resistance, then if you are short, your targets should be support and if broken, stops to above broken support in case support doesnt become resistance

4) previous swing hi-lo are game or price dictated suppor resistance zones and thus targets too.

that is what comes from the back of my mind

Thank you Jacinto for your reply. The answer is very helpful. (1) sounds good but could you explain it in more detail please ?

I use (3)when i place limit stops but sometimes the market just misses my stop by a few points and this can cause a loss in profits.

I can hold a trade for anythin from one hour to about six hours, overnight if conditions are met.

Thank You

 

[jacinto]

Thank you Jacinto for your reply. The answer is very helpful. (1) sounds good but could you explain it in more detail please ?

I use (3)when i place limit stops but sometimes the market just misses my stop by a few points and this can cause a loss in profits.

I can hold a trade for anythin from one hour to about six hours, overnight if conditions are met.

Thank You

then if you use 3) think of the following

support 1 at $5, suppor 2 at $4, support 3 at 3$, you think it will breach 1 and then 2, but most likely not 3, then once support 1 and 2 are broken, stop to support 2 if you didnt exit before hand.

wont do a chart, sorry, but concept should be straightforward

j

 

[Akuma99]

Thumbs up to you if you have the record you say, seems to me the solution to your exit strategy perhaps is not in what indicator or technique to use, but rather developing the ability to understand the market as you say you do to your exits just as you do to your entries, i.e. mental rather than physical. If you can understand the market to a 90% success rate for entries, then applying that same thinking to your exits should spawn some nice results.

 

[Citizen2007]

Thank you Jacinto for your eply. Sorry the one that i did not understand clearly was(1) in post #7. The one about the average "period" range.

Thank You

 

[jacinto]

Thank you Jacinto for your eply. Sorry the one that i did not understand clearly was(1) in post #7. The one about the average "period" range.

Thank You

it is statistical, look up ATR as an indicator. (Average true range). or in the same reasoning, but not identical, if the average move for a day is 100 pips, and you day trade, then 100 pips should be the target (hi to low), at time you will get more, at times less, but leave that to you

 

[Citizen2007]

Thumbs up to you if you have the record you say, seems to me the solution to your exit strategy perhaps is not in what indicator or technique to use, but rather developing the ability to understand the market as you say you do to your exits just as you do to your entries, i.e. mental rather than physical. If you can understand the market to a 90% success rate for entries, then applying that same thinking to your exits should spawn some nice results.

Akuma

Thank you for your reply. I know what you are saying but for seem to be struggling with it. I am finding it difficult (dont know why) to view the charts for exit in the same way. I am sure its psychological too, but it hasn't quite clicked.

Thank You

 

[Citizen2007]

it is statistical, look up ATR as an indicator. (Average true range). or in the same reasoning, but not identical, if the average move for a day is 100 pips, and you day trade, then 100 pips should be the target (hi to low), at time you will get more, at times less, but leave that to you

Jacinto Thank you for your quick reply. I will have a look at that now and play about with it.

Thank you

 

[firewalker99]

Hi,

I have been trading Forex for some time now and have a very good understanding of the markets. I am at the stage where i can determine market direction quite accurately. I can also determine very good support and resistance levels. But i am struggling on only one point.

I am however struggling with finding a suitable exit point or signal/indicator

As it happens, I've recently started a new thread that focuses on the discussion of exits. It contains some practical chart examples and some numeric analyses. So I'm guessing it will interest you (and hopefully help you).

It starts here
http://www.trade2win.com/boards/showthread.php?p=333064#post333064

 

[alexander]

I can enter a trade that can be profitable 90% of the time. I am however struggling with finding a suitable exit point or signal/indicator.

Profitability alone means nothing. I have posted a link to an article before all traders who think profitability all by itself means something should read and understand:

http://www.tradingpatterns.com/profitability.pdf

You can be 90% profitable and still lose money. I know several traders who win 9 out of ten but end up losing all their capital. It depends on the profit factor and average win to average loss ratio. I think you are trying to improve those two variables with suitable exits strategies. At this profitability level it is hard to do. Maybe you should lower your profitability and increase your avg win/avg loss ratio.

Alex

 

[Citizen2007]

Firewalker

Thank you for the link. I wil have a look and maybe i can find something there.

Alexander

Thanks for the article, Although at first glance it looks to be over my head with all the formulas (never was much good at maths), I will read it and see what i can learn from it .

There seems to be something wrong with my trading and i cannot quite put my finger on it. My profits dont match the potential profit of the moves that i pick. I dont do any paper trading, its all done live and with real money.

Its a bit like going shopping and leaving the goods behind, so to speak.

Thank you all for your help.


Thank you

 

[nine]

Hi,

I have been trading Forex for some time now and have a very good understanding of the markets. I am at the stage where i can determine market direction quite accurately. I can also determine very good support and resistance levels. But i am struggling on only one point.

I can enter a trade that can be profitable 90% of the time. I am however struggling with finding a suitable exit point or signal/indicator. I have tried stochastics and RSI but am not quite happy with the outcome. I am struggling especially with the smaller trades where the market moves about 40 pips with a potential of about 25 pips.

Today all the trades that i entered had a potential of about 140 pips on cable, but i just could not find a suitable exit point.

If anybody has any ideas or can help with an exit using multiple timeframes i would be grateful.

Also any excel programmers out there? I have an API developed that imports data from esignal into a spreadsheet but am looking for a programmer to help with programming.

Thanking you in advance for any assistance.

What are your primary timeframes? What timeframe do you enter on and thus what might be the lower timeframe you use to seek loss of momentum for your exits?

 

[blackcab]

I can enter a trade that can be profitable 90% of the time. I am however struggling with finding a suitable exit point or signal/indicator ... I am struggling especially with the smaller trades where the market moves about 40 pips with a potential of about 25 pips.

Today all the trades that i entered had a potential of about 140 pips on cable, but i just could not find a suitable exit point.

This is crude but have you tried small fixed profit targets? If you're directionally right 90% of the time then why not try 15 pip fixed target and increase size?

 

[Citizen2007]

What are your primary timeframes? What timeframe do you enter on and thus what might be the lower timeframe you use to seek loss of momentum for your exits?


I use daily/240/60 for analysis and to determine trading style for next trade. Use 15/5/3 for entry.I normally enter from confirmation on 15 m and look for exit in 3 min when 15M reaches a s/r level. I can determine quite well s/r levels in 15m but am struggling to find an indicator/signal/method to confirm my exit from this trade. I know that i can place a limit stop there but am looking for an indicator that i can use, but one that i can also automate.




This is crude but have you tried small fixed profit targets? If you're directionally right 90% of the time then why not try 15 pip fixed target and increase size?

I am now atttempting to adjust myself to this approach.

Thank you

 

[jacinto]

What are your primary timeframes? What timeframe do you enter on and thus what might be the lower timeframe you use to seek loss of momentum for your exits?


I use daily/240/60 for analysis and to determine trading style for next trade. Use 15/5/3 for entry.I normally enter from confirmation on 15 m and look for exit in 3 min when 15M reaches a s/r level. I can determine quite well s/r levels in 15m but am struggling to find an indicator/signal/method to confirm my exit from this trade. I know that i can place a limit stop there but am looking for an indicator that i can use, but one that i can also automate.




This is crude but have you tried small fixed profit targets? If you're directionally right 90% of the time then why not try 15 pip fixed target and increase size?

I am now atttempting to adjust myself to this approach.

Thank you

hi,

can you post a couple of charts of your trades to be able to give a proper comment.

j