Entry is easy, but Exit is really difficult | Forex Factory

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Entry is easy, but Exit is really difficult

  • #1
  • First Post: Dec 29, 2009 9:48pm Dec 29, 2009 9:48pm
Is there anyone would like to share how you exit?
  • #2
  • Dec 29, 2009 10:17pm Dec 29, 2009 10:17pm
There are 4 reasons why I will exit a trade:

1. The stop gets hit.
2. My system generates a signal in the opposite direction. Doesn't make much sense to stay in the trade when that happens.
3. Trend line break. Doesn't always result in capturing the most pips but in all reality do you need to get them all? No. You will see fantastic gains if you catch just 50% of most trends.
4. Hesitation or a pause at or near key support or resistance levels. This one is more of a judgement call that gets better with experience. Now the support and resistance level may be the result of a moving average or standard support and resistance levels.

Hope that gives you some ideas.
  • #3
  • Dec 29, 2009 11:42pm Dec 29, 2009 11:42pm
Quoting magnumfreak
There are 4 reasons why I will exit a trade:

1. The stop gets hit.
2. My system generates a signal in the opposite direction. Doesn't make much sense to stay in the trade when that happens.
3. Trend line break. Doesn't always result in capturing the most pips but in all reality do you need to get them all? No. You will see fantastic gains if you catch just 50% of most trends.
4. Hesitation or a pause at or near key support or resistance levels. This one is more of a judgement call that gets better with experience. Now the support and resistance...
y catch 50% of the pips when u are confident u can get 80-90%? its all about calculated risk. if u have the ability to catch 80-90 den go for it! never limit yourself to gains.
personally i exit on 2 conditions 1) if im wrong i will exit due to stop loss being hit. 2) if im right, i will ride the wave until bill william's alligator setup where the mouth starts to close (signals the dropping of momentum n number of traders). thats y i said no point in running off at 50% when it clearly shows u that theres stil alot of people in the market pushing the price in your direction
  • #4
  • Dec 29, 2009 11:44pm Dec 29, 2009 11:44pm
Quoting goldiger
Is there anyone would like to share how you exit?
hi goldiger,
have u thought bout use entry as ur exit 2?...
  • #5
  • Dec 29, 2009 11:58pm Dec 29, 2009 11:58pm
Do you know why its so much harder than entry?

With Entry you can try several times on row because it is the first thing you do in the trade.... while with exit you need entry to bee perfect... What I am saying is this...

Your entry plan has 60% winning rate and Exit has 60%...

The chance for both of them to work the chance is only 0.6 x 0.6=36%


Seriously I don't pay that much attention to exit because it is too hard... I just roughly take 1:3-1:5 of what I was risking...

This is all backtested so yes, I have an edge....
  • #6
  • Dec 30, 2009 12:54am Dec 30, 2009 12:54am
Quoting yunielescaz
y catch 50% of the pips when u are confident u can get 80-90%? its all about calculated risk. if u have the ability to catch 80-90 den go for it! never limit yourself to gains.
personally i exit on 2 conditions 1) if im wrong i will exit due to stop loss being hit. 2) if im right, i will ride the wave until bill william's alligator setup where the mouth starts to close (signals the dropping of momentum n number of traders). thats y i said no point in running off at 50% when it clearly shows u that theres stil alot of people in the market pushing...
I am not saying you shouldn't catch 80+% I am saying it isn't required for success in trading. Too many people beat themselves up over exiting a trade too soon instead of celebrating the success of the trade.
  • #7
  • Dec 30, 2009 1:13am Dec 30, 2009 1:13am
Closing a long is a sell. Closing a short is a buy. Get used to that concept. It's how the market works.

The only exception should be that we may wish to exit because we are over leveraged and see a better opportunity.
Gone to a better place
  • #8
  • Dec 30, 2009 3:06am Dec 30, 2009 3:06am
I personally exit my positions before major S/R levels and round numbers. With this technique you'll have a better hit ratio which will increase profitability.

I don't care about the daily range or any of that because I'm trading long term and I hold my positions usually for days and weeks so I might see a short retracement but I know in my gut that it will reverse and continue.
  • #9
  • Dec 30, 2009 3:47am Dec 30, 2009 3:47am
Quoting magnumfreak
I am not saying you shouldn't catch 80+% I am saying it isn't required for success in trading. Too many people beat themselves up over exiting a trade too soon instead of celebrating the success of the trade.
of cos any form of profit be it small or large is a good thing. but what if you have hit your take profit and yet u see that momentum in that direction is still high? will exiting be a good idea? personally i would move my stop loss to my take profit point. so even if anything happens bad happens i still can end up with my original take profit target. if anything good happens then i would have captured more pips! its like walking along a sidewalk with 1dollar notes stretched out in front of u. u pick them up as u walk. u decide it to call it a day but there r stil so many 1dollar notes ahead of u. would u call it a day? i would pick those notes to the point when there is no more to pick(aka trend running out of steam). every1 needs a stoploss but not every1 needs a rigid TP.
  • #10
  • Dec 30, 2009 5:17am Dec 30, 2009 5:17am
When you plan your trade, surely the exit will include in your plan, if you don't know how to exit, then you don't have a plan, if your method tell you take a trade, but will see what it will happened then so you can move your stop or take profit, that you still be in planed.

E.g Like when you try to ride the trend, you will move your stop when market make high/low enough for you to see clear that when market go break that low/high it will stop trending in your direction, so you will get out when that low/high broke, and when you do that you still have your profit target point in advance by calculate the probable reach point of the trend, and you have to know where you are at market, big swing or small swing? ok lots of things with the exit.

It's just the thing i am learning now, i share with you to learn it again, said is easy, do is the other thing
Back to the beginning ... demo
  • #11
  • Dec 30, 2009 5:45am Dec 30, 2009 5:45am
My philosophy is there are two trader types: One who enters to go in a general direction, kind of a buy-and-hold approach, and one who enters with the intent to go from point A to point B. If you're the first type, you can manually trail a stop with each new support/resistance area, and if you're the second type, getting out should be for the same reason as getting in - in other words, whatever you used to get in should be what you use to get out.

Rob
  • #12
  • Dec 30, 2009 6:04am Dec 30, 2009 6:04am
Quoting yunielescaz
of cos any form of profit be it small or large is a good thing. but what if you have hit your take profit and yet u see that momentum in that direction is still high? will exiting be a good idea? personally i would move my stop loss to my take profit point. so even if anything happens bad happens i still can end up with my original take profit target. if anything good happens then i would have captured more pips! its like walking along a sidewalk with 1dollar notes stretched out in front of u. u pick them up as u walk. u decide it to call it a day...
maybe you should go back and read my post again. I never said anything about a rigid TP. I look for trendline breaks and/or price movement around support and resistance to determine my exits. I certainly do not rely on any lame lagging moving average (aka alligator)to determine when and where I exit.

and as far as your dollar bill analogy in Forex as in any trading you are blindfolded picking up those dollar bills you have no guarantee there are any more dollar bills to pick up.
  • #13
  • Dec 30, 2009 7:07am Dec 30, 2009 7:07am
Quoting magnumfreak
maybe you should go back and read my post again. I never said anything about a rigid TP. I look for trendline breaks and/or price movement around support and resistance to determine my exits. I certainly do not rely on any lame lagging moving average (aka alligator)to determine when and where I exit.

and as far as your dollar bill analogy in Forex as in any trading you are blindfolded picking up those dollar bills you have no guarantee there are any more dollar bills to pick up.
well if u do finish reading 3 of his books by bill u will understand it is not lagging. the alligators with AO n AC are bar for bar information. n its always compared to the previous bar only. thus painting a clear information as compared to the previous bar. blindfolded or not is dependent on how u see the market. some people can see it some people dont. if you're blindfolded its not a good idea to say others are the same as u.
  • #14
  • Dec 30, 2009 7:49am Dec 30, 2009 7:49am
Quoting yunielescaz
well if u do finish reading 3 of his books by bill u will understand it is not lagging. the alligators with AO n AC are bar for bar information. n its always compared to the previous bar only. thus painting a clear information as compared to the previous bar. blindfolded or not is dependent on how u see the market. some people can see it some people dont. if you're blindfolded its not a good idea to say others are the same as u.
Correct me if I'm wrong but I was under the impression you only used the "Slope Direction Line"?

http://www.forexfactory.com/showpost...1&postcount=23
  • #15
  • Dec 30, 2009 12:35pm Dec 30, 2009 12:35pm
There is one reasoan why I exit a Trade..
Its ME.. with a kicker..

Your enteries and exits should be predetermined in your game plan.. yes game plan.. if you don’t have one.. then get one.. till then keep ur finger off the push botton.

Who says entery is easy?.. your exits are best setup with your enteries.. better entery will lead to better exit.. its like the old saying: ”money is the purchase, not the sell”.. Timely entery, would positioning you into a much superior trade management, which leads to better exits.

Our job as a trader is to catch markets next ride.. once its achived, one's needs to be paitent enough to not exit prematurely based on own Expectancy along with inadvanced planning.. at the same time should not be mixed up with a set in stone hard core rule (eg. set SL. etc..) to be worship when u are dealing with a constant changing invironment, the Market.. thats when the "ME" part based on your "own expectancy" kicks in..

forget hit ratio.. its overated.. I lose a lot and I am profitable… ohhhhhh yes losing!!!.. yep, losing is a big part of this game and it’s got to have a speciall place of its own in your game plan.. its all about squeezing the most out of the ones that you do catch, rest is just surviving.

My advise to you my friend is.. to have a game plan with a preplaned out tactics for each situation in a given trade, together with your own expectancy and a solid Risk Management.. and stick with it.
Its your only edge with this beast.

By the way.. Billy W, died as a poor man.. thats all I am gonna say about indi’s..
Bottomline is king.
  • #16
  • Dec 30, 2009 2:11pm Dec 30, 2009 2:11pm
Quoting goldiger
Is there anyone would like to share how you exit?
I favour time based exits. If you've got a good entry, a time based exit will usually put your win rate greater than 50% and the wins are usually a little bigger than the loses too.

I first became interested in time based exits when I read about them in book 'Way of the Turtle' which is my favourite trading book bar none.

Most exits seriously degrade a trading system when you're waiting for the trend to reverse before you're getting out. Time based exits are easy to follow too.
  • #17
  • Dec 30, 2009 6:21pm Dec 30, 2009 6:21pm
Quoting goldiger
Is there anyone would like to share how you exit?
Personally, I don't see this as a problem, ... if you have a trading plan and following the plan, than that's just a matter of execution.
... but, if your entry hasn't got any legs and exit is based on some hopeful profit, than of course you may find yourself in a dip shit.
Perhaps, as one of the New Year's resolutions it would be good to make this as your important agenda: Trade the plan not the hopes.
Happy trading.
  • #18
  • Jan 1, 2010 2:26pm Jan 1, 2010 2:26pm
Quoting smikester
Closing a long is a sell. Closing a short is a buy. Get used to that concept. It's how the market works.

The only exception should be that we may wish to exit because we are over leveraged and see a better opportunity.
Exactly!
  • #19
  • Edited 2:43pm Jan 1, 2010 2:43pm | Edited 2:43pm
Quoting microsuck_36
hi goldiger,
have u thought bout use entry as ur exit 2?...
Excuse my rant. Every time this discussion starts, somebody comes up with this pearl of wisdom. So how do you suppose it will work if you are using a pin or inside bar as your entry signal?

Exits are separate and distinct from entries and have to be treated as such. The title of the thread says it best.
  • #20
  • Jan 3, 2010 10:52am Jan 3, 2010 10:52am
Quoting CodeMeister
Excuse my rant. Every time this discussion starts, somebody comes up with this pearl of wisdom....
Nothing wrong with the statement - entry is the opposite of exit but it entirely depends on the frequency and conditions of when your system generates a signal. In an exit you're looking for a point at which you can estimate the probability is reversing. If your system doesn't present many signals then inevitably, it won't make for a good exit signal. Replace with static or trailing exit points (ie dumb exits).
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