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Exits: Our worst enemy

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  • First Post: Jul 12, 2007 10:46am Jul 12, 2007 10:46am
Guys, i have a problem. A big problem in my opinion.

I tend to exit without a good reason and i cant break out of the habbit!

Today i exited my eurcad and usdcad short trades for 20 and 46 pips respectively...For no good reason at all other othan i was in profit.

HELP
100% of traders are losers. Just that some win more than they lose!
Maybe take a look at the discussions linked at the bottom of the page:

Similar Threads.
how if it is a loss? is it that quick?

trading the news is more stressfull, it is natural (i guess...)
i often hear that "exits are more important than entry" and vice versa, or things like "the money is in the exits" etc. but one thing i could never understand...what is the difference between an exit and an entry? with regard to the expectancy of the system, entry and exit are both are technically the same thing, no? if i short GBPUSD, why does it matter if that trade is getting me in or out of a position? shouldnt i have the same mindset for both trades?

this question is not aimed at you Mr. D, because you are talking about human habits, which is a different thing...but your post sparked me to ask this quesiton to everyone
Relax and be happy.
You should have a target before you even enter the trade. Then set it and forget it. If you trust your trade plan.
I had a target. "had" i also planned to scale out of the position. But 70 pips looked very nice :d
Quoting bballfan31
You should have a target before you even enter the trade. Then set it and forget it. If you trust your trade plan.


but many times if you leave pips on the table the rat come and eat them away.
i.e the trade retraced on you.

One thing that is always said is to never turn a winner into a loser.
100% of traders are losers. Just that some win more than they lose!
Quoting Mr demark
One thing that is always said is to never turn a winner into a loser.
rubish. if following your plan means turning a winner into a loser, then so be it
Relax and be happy.
Though I tend to use targets and levels set by my filters, what it really comes down to is estimating whether the price is likely to move in your direction more, or not. For example, if you have a long position that's working, at any point you might want to ask yourself whether had you been flat at that point, would you go long? If the answer is no, it's probably tiome to close.
To inforce the discipline a bit, you might want to pick a running average of a length so that it is kust long enough to clear the trend - for example runs slightly above the trend if you are short, slightly below if you are long. When it crosses into the body of the price , it's a good signal to get out.
I personally enter off confluence of support or resistance (depending on whether I am long or short), and I exit at the next level of support/resistance.

Let's say I enter long and 50 pips above there's a previous swing top/bottom plus a round number. I'd exit few pips before hitting that level.

Other techniques I use for exiting are price pattern projections and the Average Daily Range (for intraday trades).
Quoting Mr demark
Guys, i have a problem. A big problem in my opinion.

I tend to exit without a good reason and i cant break out of the habbit!

Today i exited my eurcad and usdcad short trades for 20 and 46 pips respectively...For no good reason at all other othan i was in profit.

HELP
Check out this old thread of mine. Not sure if will help you much, all I know is that many of the points raised completely changed my approach to my (then) exit strategy (I use that phrase for want of a better description of the aimless method I was using).
There might be something to glean from it. We know from the rest of your input here that you're in touch with this thing, so I'm sure you'll find a way out of this little problem.
Quoting merlin
i often hear that "exits are more important than entry" and vice versa, or things like "the money is in the exits" etc. but one thing i could never understand...what is the difference between an exit and an entry? with regard to the expectancy of the system, entry and exit are both are technically the same thing, no? if i short GBPUSD, why does it matter if that trade is getting me in or out of a position? shouldnt i have the same mindset for both trades?

this question is not aimed at you Mr. D, because you are talking about human habits, which is a different thing...but your post sparked me to ask this quesiton to everyone

It's kinda difficult becuase an exit is not necessarily a reversal to go opposite. Was thathat you mean?
100% of traders are losers. Just that some win more than they lose!
Quoting HalifaxCB
For example, if you have a long position that's working, at any point you might want to ask yourself whether had you been flat at that point, would you go long? If the answer is no, it's probably tiome to close.
exactly why i think exits and entries are the same thing!
Relax and be happy.
Quoting HalifaxCB
if you have a long position that's working, at any point you might want to ask yourself whether had you been flat at that point, would you go long? If the answer is no, it's probably tiome to close
I dont quite agree.

A certain price level might be not appealing to enter a position but that doesnt mean that it might yet be appealing to exit. For example, you might have missed the entry on a swing trade and the swing might have carried through half way through the swing already, so you'd rather not enter and wait until the next swing. However, there's still potential on that swing for some extra juice and thus might want to stay in a little bit further.
Quoting PeterFM
Check out this old thread of mine. Not sure if will help you much, all I know is that many of the points raised completely changed my approach to my (then) exit strategy (I use that phrase for want of a better description of the aimless method I was using).
There might be something to glean from it. We know from the rest of your input here that you're in touch with this thing, so I'm sure you'll find a way out of this little problem.
thank you peter. And remember guys, Money management is KEY!
100% of traders are losers. Just that some win more than they lose!
Quoting WTB
I dont quite agree.

A certain price level might be not appealing to enter a position but that doesnt mean that it might yet be appealing to exit. For example, you might have missed the entry on a swing trade and the swing might have carried through half way through the swing already, so you'd rather not enter and wait until the next swing. However, there's still potential on that swing for some extra juice and thus might want to stay in a little bit further.
same thinking here. An exit is not quite a reversal signal.

Remember there are three positions in trading.

Long
Short
Flat (or no position)
100% of traders are losers. Just that some win more than they lose!
Hi Mr demark

Something that helped me to get past that obstacle was to open trade 2 accounts. One was for the trading plan and the other for taking quick profit. I started of 50/50, then gradually increased the trading plan account. In the end there was enough gratification in seeing my trading plan account grow to make up for the "instant gratification" I needed to boost myself all the time. All this small psychological issues we have to overcome on our way .......

Enjoy
Mr D
You have to stick to your trade plan. There are those times that ocassionally,sometimes,once in a while, if you are not checking on the trade that it could come back BUT I am not saying set the trade and never look at it. What I am saying is do not sit and watch the trade. If you do you will probably close it before it hits your target. Yes 70 pips is nice but if your target is 150 pips and it gets there 10 hrs from now would you have a problem with that. I would. If your trades are GREEN and they miss your targets regularly and become losers you are doing something wrong and need to look at it. Plan the trade and trade the plan

Also take the same trade on a demo and let it run to your target. At the end of the month take a look at how pips you missed out on.

I also know that the amount of $ you have to trade with makes a big difference as to how fast we close our positions to lock in profits. Try taking a smaller position so as to take some of the stress out of tading or anxiety of "I have to close this now or it will come back on me" not a good way to trade and not a good excuse to close.

Let the charts tell you when to close not the pips.
I wonder if the problem was because CAD had no further support after the lowest low we see on our charts. It is kinda difficult for me to let the pair set new lows with my trades. The only tool i have is fibonacci Extensions (127% 138.2% etc)

well, the learning process continues.

I read the thread that peter directed me to and now i'm wondering if scaling out of the losing position and scaling into the wining is what we ought to be doing here
100% of traders are losers. Just that some win more than they lose!
Quoting Mr demark
Remember there are three positions in trading.

Long
Short
Flat (or no position)
yes, so at any given point, you are one of these three things on every instrument. so here is my point....if you want to be short at this very momement, should it matter if you have a position already? whether it is short or long? or whether you are flat? basically what im asking, should my current position effect my opinion on the future? and if the answer is no, then how can entires and exits be any different? entry/exit is mear administration work to make my position reflect my opinion.
Relax and be happy.
Quoting Mr demark
I wonder if the problem was because CAD had no further support after the lowest low we see on our charts. It is kinda difficult for me to let the pair set new lows with my trades. The only tool i have is fibonacci Extensions (127% 138.2% etc)

well, the learning process continues.

I read the thread that peter directed me to and now i'm wondering if scaling out of the losing position and scaling into the wining is what we ought to be doing here
Scaling in I treat as a regular method, I set buy stops on the way down a retrace (vice-versa for shorts) but I haven't tried scaling out of losers, yet.
With a limited maths ability I would think that you may still be limiting your overall upside if the trade does turn round. I just felt that one of the good sound-bites from that thread was .. if you start a journey with 4 tyres you want to finish it with 4 tyres..or something like that.
Keep your thoughts coming, exits are, as you say, the hardest part.
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