Thanks, you've made me feel better, and I'm NOT being facetious. I'm still experimenting and asking questions after almost 4 years; now I've found somebody who's doing it after 7 years. So I'm not necessarily an idiot, for not having my method finalized by now.
In my experience, it's very difficult to gain any kind of edge from exits. Look at the number of threads on exits compared to entries. If there was a clear-cut, 'one-approach-fits-all-situations' way of profiting from exits, it would be more apparent, and probably more frequently discussed.
If there is an obtainable edge, it has to be along the lines of (1) scaling out at points of higher probability reversal, and (2) exiting more quickly if the market appears to be ranging, and conversely, allowing more to ride in strongly trending situations.
Be careful about trending and ranging situations however. If you're not careful, you introduce a 2nd unknown into the equation, and that means your net result is the probability of both unknowns. That's a sure-fired way to kill your method. Both approaches may be 70% profitable, but .7 * .7 is only .49. Two edges can combine to create a losing system. This is why adding more indicators, more filters, whatever, does not mean you'll profit more.
In a market that moves near-randomly, this is likewise not going to be clear-cut.
Trading can be seen as an exercise in conditional probabilities.
Inverting what the "95%" do is not necessarily a way of making it into the "5%".
Most of these edges occur around inefficiencies. That inefficiency can be a human-based supply or demand area, that inefficiency can be opening prices in some markets, that inefficiency can be a correlation between 2 markets, that inefficiency can be caused by money flow, that inefficiency can be caused by technical price levels, that inefficiency can be caused by a forced closing or opening time. There's a lot of them, but where people (in mass) interject their opinion on the markets, price becomes inefficient. There-in lies an edge. Edges are the reward for making an inefficient process more efficient. It's the market's way of financially correcting itself.
So the question becomes: does the market move far enough, often enough, to provide a margin of error capable of overcoming our personal level of inaccuracy?
1. Trend trading
2. Counter trend trading
3. Momentum trading
4. Fundamental trading
If your goal is to capture a trend, then you need to be prepared for all the downsides that occurs. Your method needs to be profitable enough to get you in early, and out late enough (but not too late). Trend trading is an art all it's own.
