DislikedWhy not come up with an exit strategy for this system that is a little more hands on and robust, as opposed to the 'wait until stop gets hit or friday comes' plan.
This week saw a pretty amazing breakout on the trigger of this strategy across several pairs. Some sort of exit strategy based on 1hr price crosses over an MA with partial take profits might have worked well.
I know that approach is not completely mechanical and would require some work, so if your looking for an easy way to make money than that's probably not the best route to go...Ignored
My experience from trading this system since 10 months so far is, that a trade needs time to evolve its full potential. I had some major gains last year in October where others might have exited the trades prematurely. Following the rules was a wise thing to do. But as some users pointed out - it hasnīt been a normal year, so we canīt expect that to happen every time.
Iīm trading a daily version of the system with very little risk, so it doesnīt hurt me to let profits run and wait patiently until my stop is hit or the time stop tells me to close the position.
Based on that system I also trade range breakouts with the same stop system. SL to BE if position gained 1R, trailing after a position gained 2R. As Iīm trading with higher risk here, it hurts to see gains fade away. As Iīm also trading with S/R levels I added another rule for exiting the trade.
Whenever price hits a major S/R (I look for S/R on monthly, weekly, daily and 4h timeframes) and has a hard time breaking through I close the position that accumulated the highest gain. Thatīs an easy thing to do once you place orders on a daily basis knowing that there are still other positions in the market that could benefit from trend continuation. Itīs harder if you only place your orders once a week. So whoever does that might consider of taking profits by closing parts of their initial position, letīs say 50% or 30%.
As I said, itīs easier for me to do that as Iīm closing a complete position and if there has been a strong move, this move might have triggered 2 or 3 or even 4 orders, where I just close the one with the highest gain. So it could mean closing 25% or 50% of the whole position depending on how many orders got triggered. So in my case the markets not just decides on how many orders get triggered, but also decides the percentage of partial profits Iīm taking.
Some people might have problems in following my thoughts as I would have a couple months ago. I good thing about this strategy is to get a feeling for the market. You can only get that by being in the market and staying in the market, so following the rules. And after some time you start seeing things that enable you to optimize your gains.
And let me say one more thing. Itīs rare that price hits a support level and bounces of in the other direction without retest. So you have enough time to make your decision whether you want to exit the trade or not. To realize that it also needs experience and Iīm still learning too, but thatīs the only way to survive on the long run - be willing to learn, keep your mind open and never risk to much. Especially the last part is important to achieve the goal as it buys you the time you need to learn. If you risk 5% with each trade because you want to get rich in no time, this will most likely kill your account before youīve had even the chance to gain enough experience. You donīt need to get rich in one day, because the markets will be there tomorrow as well and you will have plenty of time to increase your initial trade risk and increase your gains, once youīre comfortable with your trading and know that youīre profitable.
