What Is Best Indicator For Getting OUT of Trade? | Forex Factory

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What Is Best Indicator For Getting OUT of Trade?

  • #1
  • First Post: May 3, 2009 3:27pm May 3, 2009 3:27pm
Hello Everyone,

Please let me explain what I am doing so you will understand what I am needing help with.

I have developed a little trading system that is blowing me away. I know exactly when to enter the trade. It works with EVERY pair and I do not need one single indicator to enter the trade.

The lowest time frame I use is 1 HR. I also use 4 HR and daily.

However, getting out of the trade at the right time is what I am having somewhat of a problem doing.

Here is what I mean.

Getting OUT of the trade with profit is not the problem but I find that I get out of a trade in to many cases way to early. I will take 15 pips to 25 pips when in fact I could have gotten in a lot of cases 100 to 300 pips on the same trade. On the longer time frames this is very common, especially with the PJ.

I remember the day when I would have killed for 10 pips a day. Back then I was always trading the 5 min chart. Those days are way in the past now and I am very thankful for that.

Of course, I am NOT trying to get every single pip, that is impossible to do on a consistant basis. I am only trying to get SOME of the middle section, whereas, right now I am on the low end section.

Since I use the longer time frames, we all know that MOST of the time there is a lot of movement within ONE single candle and this is what I focus on most of the time. I mainly trade the GBP/JPY because of so much movement in each candle.

I am looking for some kind of an indicator that can help me in getting OUT of the trade at the best possible time.

Since all indicators are lagging, I am not sure what to use.

I have tried MACD, Stochastic, and a couple of others with NO success.

If anyone has an indicator they feel would really help me with this, I would appreciate some help on this.

Thank you very much for reading and any help you may wish to offer.

Have a great day,

Daniel Hansen
  • #2
  • Edited 4:20pm May 3, 2009 4:02pm | Edited 4:20pm
Don't use a TP at all. Trail your stop as long as possible.
It's not easy to do. But once you have mastered it you will not
leave any money on the table because you ride the trend till it's dead.
Best method to exit trades if you ask me.
Let winners run. Cut losses short.

You will be amazed how much easier trading becomes when your winners are way bigger
than your losing trades.
  • #3
  • May 3, 2009 5:19pm May 3, 2009 5:19pm
Zoom into a five minute chart, and draw a trendline in the direction of your trade. When that line is broken, exit. I use opposing support and resistance as targets.
  • #4
  • May 3, 2009 5:42pm May 3, 2009 5:42pm
I was having the same trouble a few months ago. Killer entries but how to get out, which can be more important than the entry. Anyways, long story short, I started looking at the donchian channel ( http://www.investopedia.com/terms/d/...anchannels.asp ). I have been using a fast one for as soon as I enter, up until I reach my first take profit area, then switch to a slightly slower one to improve the overall odds of catching a longer trend. As price moves up I just manually trail the stoploss above or below the Channel.

Here is a pic of what it kinda looks like, the pink is a 5 DC and the orange is a 13.

Also attached is the indi. If you like it cool, if not, well thats cool too. Just what has helped me out some.
Attached Image
Attached File(s)
File Type: mq4 Donchian Channels.mq4   3 KB | 3,565 downloads
  • #5
  • May 3, 2009 6:23pm May 3, 2009 6:23pm
http://dennismitchell.files.wordpres...07/04/eyes.jpg
The trend always ends.
  • #6
  • May 9, 2009 3:14pm May 9, 2009 3:14pm
The timeframe you are using is what the Doctor ordered.Remember that whatever timeframe you use to enter the trade, is the same one you exit the trade on.90% of all indicators are lagging price action,entries are the easy part of trading,what are your trade management system,trailing stops are lagging price action.You need leading indicators to exit any trade.
Pivot Point,Fibonacci Extension,Pitchfork,Market Swing Points are the best ones.You are using swing trading timeframe,but still using scalping mentality.Your timeframe will determine your method of trading,the time you stay in the trade, and the target you are gunning for.Before taking any set up you must know where support and resistance are,where's your stops and the probable distance of travel,without trade management you have no method of trading.You can flip a coin to enter and with proper trade management you will be successful.Don't be like cats quick to climb trees but afraid to come back down.Know where your entry,stop loss,break even,and exit area's are before taking any swing trade.
  • #7
  • Oct 16, 2009 8:19am Oct 16, 2009 8:19am
Um, may sound rather silly, but if you know "exactly when to enter the trade", then you should know "exactly when to exit the trade".

The time to exit the trade is when you get a signal to trade in the opposite direction using your system (or is that being too naive for your particular system?)
  • #8
  • Oct 16, 2009 8:24am Oct 16, 2009 8:24am
The best way to exit any trade, regardless of the entry system used is to remove greed from the thought process.

Keep that perspective of "I would have killed to make 10 pips" and don't be greedy.

Just my 2 cents.
  • #9
  • Oct 16, 2009 8:25am Oct 16, 2009 8:25am
Quoting forex_sake
Um, may sound rather silly, but if you know "exactly when to enter the trade", then you should know "exactly when to exit the trade".

The time to exit the trade is when you get a signal to trade in the opposite direction using your system (or is that being too naive for your particular system?)
That was my first thought too. If your system is so amazing that it can tell you when to enter then you should hold the position until it tells you to go in the opposite direction because that would also be an amazing entry.
  • #10
  • Oct 20, 2009 4:04pm Oct 20, 2009 4:04pm
Quoting dans4x
Hello Everyone,

Please let me explain what I am doing so you will understand what I am needing help with.

I have developed a little trading system that is blowing me away. I know exactly when to enter the trade. It works with EVERY pair and I do not need one single indicator to enter the trade.

The lowest time frame I use is 1 HR. I also use 4 HR and daily.

However, getting out of the trade at the right time is what I am having somewhat of a problem doing.

Here is what I mean.

Getting OUT of the trade with profit is not the problem but...

I use RSI indicator...I draw trend lines there. It happens that in this case RSI is leading indicator(before line is broker on price chart it is broken on RSI)..sometimes I leave trade too early but we do not want to catch every move(100% of it). I have learned it in some article...can't remember whose - probably Sylwester May. But it can not be used on lower charts than 4H.
  • #11
  • Oct 20, 2009 4:52pm Oct 20, 2009 4:52pm
On the other hand, whip your lazy butt and backtest your system, see the smallest move they make in several trades. And you got your exit point.
  • #12
  • Oct 20, 2009 5:11pm Oct 20, 2009 5:11pm
I think you're looking for the holy grail. Rethink your objective.

Is your objective to be successful or take every possible pip from the market? If it's to take every possible pip from the market you're on the losing end of the battle. Take what the market gives you and be thankful to trade another day.

The market isn't your friend. Jab and move, jab and move. You need excellent footwork to survive.
  • #13
  • Oct 21, 2009 12:05pm Oct 21, 2009 12:05pm
Quoting RVettel
I use RSI indicator...I draw trend lines there. It happens that in this case RSI is leading indicator(before line is broker on price chart it is broken on RSI)..sometimes I leave trade too early but we do not want to catch every move(100% of it). I have learned it in some article...can't remember whose - probably Sylwester May. But it can not be used on lower charts than 4H.
RVettel,

Do you draw the trendline on the RSI chart?
If so what RSI period are you using?
Can you post a image of your setup please?

Thanks
  • #14
  • Oct 21, 2009 12:43pm Oct 21, 2009 12:43pm
Quoting GulfCoastPip
I think you're looking for the holy grail. Rethink your objective.

Is your objective to be successful or take every possible pip from the market? If it's to take every possible pip from the market you're on the losing end of the battle. Take what the market gives you and be thankful to trade another day.

The market isn't your friend. Jab and move, jab and move. You need excellent footwork to survive.
Absolutely the best information/advice any trader would receive. I hope he/she takes note because the market isn't a "set-it-and-forget-it" type of area. Entries and exits just don't present themselves clearly as one may like to believe. When the market moves, traders need to adjust and adapt to the new situation at hand. The market is not your friend. Never get complacent, relaxed, nor comfortable when dealing with the market.
  • #15
  • Oct 22, 2009 2:42am Oct 22, 2009 2:42am
Quoting forex_sake
RVettel,

Do you draw the trendline on the RSI chart?
If so what RSI period are you using?
Can you post a image of your setup please?

Thanks
Here is what I found - it is from one of the emails(or articles?) from him(Sylwester May). Actually it shows that you can enter the market earlier based on RSI but you can use it for leaving the trade too...just reverse it. Logic is the same.

http://i36.tinypic.com/30bi79j.jpg

Those yellow areas show you advantage that you have - it's a space between break signal on price chart and break signal on RSI chart. I hope it helps. RSI is 14...this is daily chart as I think. Im smaller time frames this can work a bit worse - that's why I wrote at least 4H.
  • #16
  • Oct 22, 2009 4:35am Oct 22, 2009 4:35am
Once you trade has matured to a point where you are happy, move your stoploss to BE, once it has reached another marker, lock in some profit and then forget about it. In the end you will have some well timed entries that run for mass periods and you will win some, and loose some, but the small % that you get on early will run for weeks, months or if your willing and the markets go your way, years.

Can you do it, trade for a larger desired goal, without letting your fear get in the way. It isnt greedy to aim for large returns, its smart business!

There are other ways to tackle the above, but in the end the running winners will eclipse your 30 pips (current) and perhaps run a mile past your desired 300 pips goal. IN the end you could simply lock in the 300 pips when the market has been and gone and essentially if the market pulls back you have hit your desired goal.

Razor

I know I havent answered the question entirely, because regardless of what I say, you will probably head down another road. Truth is that profit taking is part of your persona and we are all bound by our limitations and desires. Best too you
  • #17
  • Oct 22, 2009 12:29pm Oct 22, 2009 12:29pm
I favour time-based exits. All indicators wait until a down move has aready started before they signal that it's time to get out, so you have already lost a lot of the edge from your exit by waiting for the signal.

If it's long term trend following try a lack of follow through, for example it failing to make a new high after x number of days.
  • #18
  • Oct 23, 2009 12:22am Oct 23, 2009 12:22am
  •  Deman Uc
  • | Joined Oct 2009 | Status: I Got de nuts..now hand me ur Chips | 9 Posts
My friend price is the only indicattor for exiting a trade...watch the price closely, especially how they close relative to the preceding closing price/candle.

Thats all you need.
Winning or losing is all in your mind...you creat your reality
  • #19
  • Oct 29, 2009 4:27pm Oct 29, 2009 4:27pm
Quoting forex_sake
Um, may sound rather silly, but if you know "exactly when to enter the trade", then you should know "exactly when to exit the trade".

The time to exit the trade is when you get a signal to trade in the opposite direction using your system (or is that being too naive for your particular system?)
I posted this on another similar captioned thread, but it bears repeating here:

...while I am not a programmer, I've spent the better part of 3 years, testing and going through the codes of literally hundreds of mq4 indicators. I've long since come to the conclusion, that, the indicator that gives a good entry never gives a good exit on the flipside. Typically you will lose most of the earnings you gained, by the time you get an exit signal , maybe that's why my auto-reverse EA's didn't do so well. LOL

Take the waddah attar explosion , for example, it does give very good entry signals, but the exits are rather spotty.

That being said, I've found the T3MA a very good exit indicator. If , you're in a buy and price closes below the T3MA, it usually signifies the end of the current trend, vice versa for shorts.

Now, since I can't guarantee that price will really trend and not just do a quick whipsaw, I also use a trade management program to close part of the order at specified pip levels and move the rest of the order to "entry +1"
  • #20
  • Nov 6, 2009 11:32pm Nov 6, 2009 11:32pm
How about movement between The Bollinger Bands?

I find watching the movement from the bottom to the middle or bottom to the top can often predict when you should exit a trade. And the same is applied with an upward motion of the snake.

I just luv my Bollinger Bands... pretty basic but that's the first one I load up on my charts...

Colleen
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