When to Exit a Trade ?

[rsh01]

Fibonacci retractments Oversold Undersold Tramlines its all pie in the sky as far as I'm concerned because it rarely pans out as predicted and "rarely" will empty your account sharpish.........

In the few years I have been trading I use the old adage any profit is a good profit....

Always works for me.

Your adage is f crap. Its a vague statement which is ambiguous at best, and more importantly its not a rule in which you can follow as part of a strategy. On that basis I do not think you have a strategy either, and therefore you are merely punting - please prove me wrong. Moreso you are not even defining your exit on anything related to the market, price action (behaviour also) et al....its purely based on your pnl - which the market is obviously unaware of.
At least people using indicators are using price related, albeit lagging, tools to determine possible future actions. It also provides them with a clear rule, one which cannot be misinterpreted, so that ill-discipline/complacency/laziness can be clearly identified at the time or on a quick review of trades.
Post anaysis of trades is imo an important exercise to do when reviewing exit strategy. If you identify low drawdown on the majority of, for example, with-trend trades this may allow you to reduce your SL for these trade types, increasing your r:r.

Please can you explain what the adage means with respect to your trading - do you close out as soon as its in profit eg 1 tick in the green? Or is it 10 ticks? Or any other number which has no relation to PA? How did you calculate this to be the most effective exit point? How many years of data have you backtested/forward tested this on? So looking for areas of s / r ahead and behind of your entry is futile when deciding exit points?

Also what does 'it rarely pans out as predicted' mean? If a strategy works then it obviously pans out how they predicted enough times to make it profitable. You are talking absolute tosh.

 

[jungerns]

Your adage is f crap. Its a vague statement which is ambiguous at best, and more importantly its not a rule in which you can follow as part of a strategy. On that basis I do not think you have a strategy either, and therefore you are merely punting - please prove me wrong. Moreso you are not even defining your exit on anything related to the market, price action (behaviour also) et al....its purely based on your pnl - which the market is obviously unaware of.
At least people using indicators are using price related, albeit lagging, tools to determine possible future actions. It also provides them with a clear rule, one which cannot be misinterpreted, so that ill-discipline/complacency/laziness can be clearly identified at the time or on a quick review of trades.
Post anaysis of trades is imo an important exercise to do when reviewing exit strategy. If you identify low drawdown on the majority of, for example, with-trend trades this may allow you to reduce your SL for these trade types, increasing your r:r.

Please can you explain what the adage means with respect to your trading - do you close out as soon as its in profit eg 1 tick in the green? Or is it 10 ticks? Or any other number which has no relation to PA? How did you calculate this to be the most effective exit point? How many years of data have you backtested/forward tested this on? So looking for areas of s / r ahead and behind of your entry is futile when deciding exit points?

Also what does 'it rarely pans out as predicted' mean? If a strategy works then it obviously pans out how they predicted enough times to make it profitable. You are talking absolute tosh.

And that which you have posted is exactly what I mean...........

I'll give you another adage KISS, as I was bored witless half way through your post.

Now you tell me what it means....

 

[rsh01]

So have you read my post? You say you have - cos you commented on it "about that which you have posted", but then you admit you haven't. And now you want me to comment on your post when you cldnt be arsed to read mine.

I can only infer that you have stopped everything when its not entertaining you... School, study, work, practice for anything, and it sure shows. My post wasn't to entertain btw.

Is your whole strategy just a collection of adages? So your brain can absorb it.

 

[rsh01]

It makes sense now - I just noticed you are on another thread slamming other posters for warning newbies about signal providers.

So keeping it simple is in your opinion paying for signals (own up you are buying signals aren't you - this is why you can only talk about trading in adages), which supports my earlier inference that you cannot be bothered to actually do any work.

 

[jungerns]

It makes sense now - I just noticed you are on another thread slamming other posters for warning newbies about signal providers.

So keeping it simple is in your opinion paying for signals (own up you are buying signals aren't you - this is why you can only talk about trading in adages), which supports my earlier inference that you cannot be bothered to actually do any work.

Sorry bored witless again buddy......

Certainly read it but you are a real example of someone who doesn't practice the "Keep it Simple Stupid" adage and instead back trawls people's posts in this case to try and find an angle....

I'll repeat what I practice in that any profit is a good profit which was the point I was making for the OP asking when to close a trade....

Meaning for Simpletons that any profit, is better than a loss...

Now back test that on your myriad of computer software to see if the programme agrees....

Will await your report.....

 

[rsh01]

I'll repeat what I practice in that any profit is a good profit which was the point I was making for the OP asking when to close a trade....

Meaning for Simpletons that any profit, is better than a loss...

This is where you show how clueless you are, but I will persevere and assume, despite evidence to the contrary, that you are not a retard.

Example: you have an r:r of 1:1 and a trade win ratio of 49%. Let's assume that all winners go immediately into profit, and vice versa for losers. Any profit IS NOT good enough! An rr of 1:>1 is required to stay in the game, ok?

You know where your adage works - say if you tripped over your unlaced shoes cos mummy isn't about to tie them for you and you accidently hit the buy button - your trade is immediately onside and then any profit is good - cos it was based solely on fortune. Ok?

 

[hgh]

there's no definite rules when to quit, I think.
The only rule is don't loose money during the trade.

 

[tomorton]

hgh - Although appearing to be logical, your comments show inexperience. Surely you aren't trading successfully with that approach?

I am hoping this thread sheds light on valid exit rules that winning traders are willing to share.

 

[rsh01]

The only rule is don't loose money during the trade.

Unfort this is fantasy land. Its only ppl like juggerns who don't loose money, albeit in their dreams.

 

[0007]

hgh - Although appearing to be logical, your comments show inexperience. Surely you aren't trading successfully with that approach?

I am hoping this thread sheds light on valid exit rules that winning traders are willing to share.

This is how I determine my stops:

If you work on a statistical basis and record the data of your trades then you can analyse them on a spreadsheet and derive all sorts of useful information -- one of them being what stop to use for any particular requirements or required outcome. This presupposes that you have a method/system and have been using it long enough for the data to be reliable. Having done this you can come up with a variety of stops dependent on e.g. how much drawdown you can tolerate, length of time you wish to stay in a trade and generally, how big and of what material your balls are made.

In order to arrive at some ballpark figures which can then be used as an experimental basis for trading you can run some back tests. Obviously, these leave out all psychological aspects but this is a good thing since you are trying to assess the profitability(or otherwise) of your "system?" -- which can then leave you free to work on psychological aspects later. They also leave out slippage and other broker annoyances etc but at this stage it doesn't matter since you are just trying to assess the quality of your chosen procedure.

As an example, these graphs below are derived from a backtest totally rule-based short entry and exit on 88 S&P100 stocks during a three-month period. [This was a 65day trading period which of course is very short but I was looking at a particular aspect of my trading]. From this data you can see that three different statistical stops (1x atr, 2x atr, 3%) coupled with different limits (e.g. where the system automatically closes the trade if it becomes that profitable) produce different levels of profitability (measured in this case by average percentage gain per trade - includes [loosers] losers). So, the trade was entered according to my criteria and left to run until: stopped out OR closed on profit limit OR reached end of trading period. This does mean that some trades were closed out before max profit & others let go to stop when a manual intervention would probably have been appropriate in reality - but it's a very simple mechanical system.

Although some people might scoff at the small percentage gain per trade -- just remember that this is a statistical probability and making money with a high statistical probability even though it's a reasonably slow and steady trickle, is preferable (at least in my book) to the ups and downs of the casino type approach. Of course, with a statistically reliable system just invest more in each trade to make more money (note I use the term "invest" which is what your trade is if you have the statistics on your side -- of course, the statistics will not cover the inevitable Black Swan event but good money management will help).

These results in themselves won't be a lot of use to you but they do show how a spreadsheet can illuminate your trading and help you to make good use of your collected data - and in answer to the OP's question demonstrate just one way of calculating a stop. This is the approach I've used: test the theory -- if it looks any good then test it in reality. I've found it to be much better than sticking a finger in the wind or taking the latest recommendation on a discussion forum-- after all, only you know exactly how you trade. It also has the advantage of separating psychology and system/method/call it what you will -- but you do need to be realistic with any system in that if you can't replicate it for real then the theory isn't a lot of use.

 

[tomorton]

Thorough, nice records.

I am also on the wavelength when it comes to logging trades taken, their entry parameters and how they turned out. Exit rules are possibly even more vital than for entry and unless you know what you've done, how can you repeat it, let alone improve it?

 

[fitzgeral]

When you think things are not working for you, you are facing continuous loss from trading and not seeing any future improvement than it should be to time to make a descion.

 

[fitzgeral]

I think when a contractor or any of the party of trade cheated then you should exit it. If anything more about to know then please inform us..

 

[strauss.steve]

Curse
Many buyers follow the fake persons or a trust less person blindly.So check this first about the identity of the company and it does not matter that what ever the benefit and the profit is being offered from that company.

 

[Jack Francisco]

Curse
Many buyers follow the fake persons or a trust less person blindly.So check this first about the identity of the company and it does not matter that what ever the benefit and the profit is being offered from that company.

I agree with you. That's true. stop believing people who said that you can made 100 -200pips in a days. It's all about signal seller / fake people of the some company who wants to extract money from all.

It is very important before joining a broker - try to know about the identity of the company and does not matter that what ever the benefit and the profit is being offered from that company

 

[Benj1981]

I agree with you. That's true. stop believing people who said that you can made 100 -200pips in a days. It's all about signal seller / fake people of the some company who wants to extract money from all.

It is very important before joining a broker - try to know about the identity of the company and does not matter that what ever the benefit and the profit is being offered from that company

Depends how good the offer is. Put your money in, do a few spreadbets, get your money out, and collect your prize. Ducking and diving is what winner traders do.

 

[Benj1981]

Please, if any one can tell me when one should Exit a Trade?

when it hurts too much to hold it a second longer :clap:

 

[wackypete2]

nice to see a few spammers joining the discussion.

Peter

 

[pboyles]

nice to see a few spammers joining the discussion.

Peter

Quality thread.

 

[neil]

nice to see a few spammers joining the discussion.

Peter

The educated spammer (Literate and numerate - can spell "loser" for example) is the dangerouse spammer since many equate an educated person with an honest person. However, no danger of that on this thread