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  • #1
  • First Post: Jun 4, 2009 4:30am Jun 4, 2009 4:30am
Dear All,

I am using a simple Trend Following System (trendlines mostly) which is giving me good entry points, but on pairs like EURUSD I gets a few hundreds in green, and then the trade reverses and most time leaves me with little or no profit . The exit strategy I am using (which evidently is not working) is to exit on closing above/below 75 EMA. I would like to hear from all of you, what’s your exit strategy?

Thanks for your time!
If it floats, flies, or f%^ks, rent it, it's cheaper.
  • #2
  • Jun 4, 2009 4:49am Jun 4, 2009 4:49am
Quoting n000b
Dear All,

I am using a simple Trend Following System (trendlines mostly) which is giving me good entry points, but on pairs like EURUSD I gets a few hundreds in green, and then the trade reverses and most time leaves me with little or no profit . The exit strategy I am using (which evidently is not working) is to exit on closing above/below 75 EMA. I would like to hear from all of you, what’s your exit strategy?

Thanks for your time!
Hi n000b!

I would suggest the one that does trader named Jacko use. He is trading only EU and use 100p trailing stop loss.
Well, I might say, it works really good!
  • #3
  • Jun 4, 2009 5:04am Jun 4, 2009 5:04am
Quoting elcm
Hi n000b!

I would suggest the one that does trader named Jacko use. He is trading only EU and use 100p trailing stop loss.
Well, I might say, it works really good!
Yeah, I know that thread, and also I did try that strategy. But unfortunately it almost always gets hit before I am in green, yeah I need to improve the entry further but for pairs like UJ/GJ the same strategy of entry/exit produces good results.
If it floats, flies, or f%^ks, rent it, it's cheaper.
  • #4
  • Jun 4, 2009 5:24am Jun 4, 2009 5:24am
The way I see it you have got three options:

1) target S/R

2) trail a stop profit

3) exit on reversal signal


I can't tell you which is best. Targeting S/R can be a great policy, and I tend to break my positions up into three parts, two of which target S/R, one near term and one further out. The third and final portion is given some space and I trail the stop profit below (or above if short) the recent swing points, so as long as a the trend is moving in my direction and price is making higher lows, then I'm in the game. This is a combination of 2) and 3).

Trailing stops or exiting on reversal will mean you never get right out at the top (or bottom), and you might feel you haven't milked what was a reasonable entry for enough profit. But then, if you target S/R, you'll never experience those occasional days when you catch a vertical move, or get in right at the start of something big that does some amazing things for your a/c. And therein lies the dilema. I expect that both policies could have a similar expectancy if you base them on logical rules that have some statistical significance, but for me the psychology of getting a good entry and taking nothing from it is slightly more painful than getting out of a trade and then watching it run, which is why I break my positions up with different profit objectives slightly favouring profit targets.
  • #5
  • Jun 4, 2009 5:29am Jun 4, 2009 5:29am
Quoting n000b
Yeah, I know that thread, and also I did try that strategy. But unfortunately it almost always gets hit before I am in green, yeah I need to improve the entry further but for pairs like UJ/GJ the same strategy of entry/exit produces good results.
You mean on UJ/GJ exit with 75MA?
  • #6
  • Jun 4, 2009 5:35am Jun 4, 2009 5:35am
Perhaps I should also mention that the market condition that you anticipate to manifest itself after your entry should also have some bearing on how much profit you might expect from a trade. I don't claim to know where a market is going to go or how far it is going to go, but I'm much more inclined to leave a trade running if I expect a continuation of a trend rather than if we're in a range. The time of day may also be a factor. A good trade set-up at the London open is more likely to run and not look back than one opened at NY afternoon, so this has profit taking implications too.
  • #7
  • Jun 4, 2009 5:48am Jun 4, 2009 5:48am
Quoting elcm
You mean on UJ/GJ exit with 75MA?
yeah and it works, why are you surprised?
If it floats, flies, or f%^ks, rent it, it's cheaper.
  • #8
  • Jun 4, 2009 5:57am Jun 4, 2009 5:57am
timed exits

regards
daytrading
Enter Signature
  • #9
  • Jun 4, 2009 5:59am Jun 4, 2009 5:59am
Quoting birdt
The way I see it you have got three options:

1) target S/R

2) trail a stop profit

3) exit on reversal signal


I can't tell you which is best....
Thanks for your input, appreciated! I'll look into the S/R way to doing it. I agree with trailing stop thing, it has a problem of getting you out of trade early most times if not always because the price is bound to retrace. The EMA has an advantage, that it will take you to the top most times and back sometimes .
If it floats, flies, or f%^ks, rent it, it's cheaper.
  • #10
  • Jun 4, 2009 6:04am Jun 4, 2009 6:04am
I'd also like to add that jacko's strategy is perhaps alright, only problem with me is, am not bold enough to re-enter a trade once my SL has been hit, not atleast now, I prefer to either have a reversal or a strong retracement before taking a short or long trade. So combined with a proper re-entry trailing the stoploss is the way to go.
If it floats, flies, or f%^ks, rent it, it's cheaper.
  • #11
  • Jun 4, 2009 6:10am Jun 4, 2009 6:10am
Depends what you target. Note that I trade dailies.

New daily candle open is a good position to close if you are targeting shorter term.

Donchian channel trail is another quite good if you are targeting medium term trades, for example 5-10 day donchian channel works quite well (depending on what time period trades you are targeting).
  • #12
  • Jun 4, 2009 6:45am Jun 4, 2009 6:45am
Quoting n000b
yeah and it works, why are you surprised?
No, I am not surprised, just wanted to know that I am understanding that correct. I see that a lot of trend follower turtles in the world use MA.
As I am fan of SR and TSL I will take a look at this idea about MA as well...
  • #13
  • Jun 4, 2009 7:20am Jun 4, 2009 7:20am
Quoting n000b
Dear All,

I am using a simple Trend Following System (trendlines mostly) which is giving me good entry points, but on pairs like EURUSD I gets a few hundreds in green, and then the trade reverses and most time leaves me with little or no profit . The exit strategy I am using (which evidently is not working) is to exit on closing above/below 75 EMA. I would like to hear from all of you, what’s your exit strategy?

Thanks for your time!
What about a count back line exit?
Attached File(s)
File Type: pdf Guppy-CBL.pdf   343 KB | 648 downloads
  • #14
  • Jun 4, 2009 7:47am Jun 4, 2009 7:47am
I think every system has entry and exit strategy,

ex.
entry buy support exit on resistance,
Stochastic entry sell on overbought and exit oversold area, and etc.

and
if you have entry strategy but you don't have exit point, that's funny

__________________________________

RSI divergence theory

.
  • #15
  • Jun 4, 2009 8:23am Jun 4, 2009 8:23am
Quoting errich fx
I think every system has entry and exit strategy,

ex.
entry buy support exit on resistance,
Stochastic entry sell on overbought and exit oversold area, and etc.

and
if you have entry strategy but you don't have exit point, that's funny

__________________________________

RSI divergence theory

.
well, as I said, I enter when the trend is well under way. To keep the losses low, the initial stoploss (varies from pair to pair) is set to 50-100 pips. Once the price is above/below my buy price by 50-100 pips, I set the SL to BE. Then I let the trade run until it hits & close above/below the Exit MA e.g. 75 (I am playing with different MA periods currently). If try to use the same strategy for exit as my entry, I am sure most of my trades will result in 0 pips . Besides, who don't wants to get more out of a trade?
If it floats, flies, or f%^ks, rent it, it's cheaper.
  • #16
  • Jun 4, 2009 8:26am Jun 4, 2009 8:26am
Quoting FX__jake
What about a count back line exit?
Guppy is something that I really like. Good to find/see the breakouts and change of trends. Yeah you need to takecare of false breakouts or trend changes but still a good way of looking at the chart.

I'll look into the document attached. Thanks a lot for that, really appreciated!
If it floats, flies, or f%^ks, rent it, it's cheaper.
  • #17
  • Jun 4, 2009 9:22am Jun 4, 2009 9:22am
Has anyone considered making an exit strategy based on ATR of the particular chart you're using?

I trade the 4 hr chart and each update I use the ATR to calculate a take profit level. 1.6 x ATR for the first target, 6 x ATR for the second target.

After the first target I move the stop up to BE + 1 and then trail stops on swing highs/lows in between that and the final target.

For me this has several advantages. (1) It keeps the targets dynamic to the overall volatility of the current market. If the curren price surpases the overall volatility I want to take profit. (2) Using a larger multiplier on the second target allows for trend riding and automatically adjusts when the momentum starts to fade...taking profit very near an extreme or a swing. (3) By dividing the position into two parts I am able to successfully trade a ranging market with and keep losses low while simultaneously keeping an eye toward the eventual trend.

I use an ATR set at 24 time frames to keep the overall volatility relatively smooth and even.

Any thoughts?
  • #18
  • Jun 4, 2009 9:32am Jun 4, 2009 9:32am
Quoting gspajon
Has anyone considered making an exit strategy based on ATR of the particular chart you're using?

I trade the 4 hr chart and each update I use the ATR to calculate a take profit level....
gspajon, sorry for dumb question , could you please elaborate on how you calculate the target i.e. 1.6 x ATR for the first target, 6 x ATR for the second target? I just added ATR to my chart, mostly it's less then 1. Could you please explain the process of calculating the target price?

Also, Thanks a lot for your contribution!
If it floats, flies, or f%^ks, rent it, it's cheaper.
  • #19
  • Jun 4, 2009 9:52am Jun 4, 2009 9:52am
n00b,

Its quite simple. The number you see on the ATR is the Average True Range of the chart. In otherwords the number you see is the average number of pips the chart travels in one time frame (averaged over the number of periods you enter).

Right now on my 4 hr chart, the EUR/USD ATR (set at 24 periods) is 0.0077. That's 77 pips to you and me. 77*1.6 = 123 pips (rounded to the even number). 123 pips is my first target on this chart. 77*6 = 462 pips (rounded to the even number). Thus 462 pips is my final target.

I run this calculation every four hours and set a price alarm for the first target and a limit for the second. Once the price alarm triggers I close 1/2 the position and raise the stop. From there I trail the stop on the swings.

Its not very sexy but it seems to work and gets you at least some reasonable profit. My method is averaging about 65% accuracy using this take profit idea. That means about 2/3 of the time I have a profitable trade.

Using a lower multiplier...1*ATR or 0.75*ATR would almost certainly raise that hit rate up. But as I am interested in riding trends I have it set a bit higher.

Like everything else in this game it is a balancing act. Take profit too soon and watch the price continue to move in your favor but you don't get any...take profit too late, and you watch what was once a 300 pip position turn into a 75 pip position...still profitable but...HEY!

By the way..."Greed for lack of a better word"...is VERY BAD and will eventuall cause trader ruin.
  • #20
  • Jun 4, 2009 10:12am Jun 4, 2009 10:12am
Quoting gspajon
n00b,

Its quite simple. The number you see on the ATR is the Average True Range of the chart. In otherwords the number you see is the average number of pips the chart travels in one time frame (averaged over the number of periods you enter).

Right now on my 4 hr chart, the EUR/USD ATR (set at 24 periods) is 0.0077. That's 77 pips to you and me. 77*1.6 = 123 pips (rounded to the even number). 123 pips is my first target on this chart. 77*6 = 462 pips (rounded to the even number). Thus 462 pips is my final target.

I run...
Thanks for the gspajon, will give it a try forsure. I use M30 to trade with, so I'll have to play with ATR value a bit...
If it floats, flies, or f%^ks, rent it, it's cheaper.
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