Exit is more important than the entry | Page 2 | Forex Factory

Options

Go to
Permalinks
Print Thread

Similar Threads

Scripts for Limit entry, Stop entry, Market entry 47 replies

Calculation of Money from entry and exit of a trade..and more 9 replies

Exit is more important than the entry 16 replies

How to make the entry and the exit decision ? 6 replies

Entry and Exit Strategy any good? 5 replies

Attachments: Exit is more important than the entry
Exit Attachments

Exit is more important than the entry

  • #21
  • Jun 1, 2012 8:07pm Jun 1, 2012 8:07pm
Quoting Aldente

Picking where a trend might end is exactly the same as picking where a trend might BEGIN, both difficult, both equally important(in fact they are the same thing).
Maybe. But if the truth is (as has been proven) that humans fear losing money more than they desire to gain money then it's a different situation than simply picking tops or bottoms.

When someone picks a trade they are more likely to hold on to a losing trade in fear of loss.
They are more likely to cut a winning trade short for fear that it may turn into a loss.

That's the gist of it.
When the Joker is in the deck.. fear not and play it well
  • #22
  • Jun 1, 2012 8:39pm Jun 1, 2012 8:39pm
Quoting 60minuteman
OANDA’s market data tells a very different story. Retail forex traders are actually much better at trading than people think. Our clients are far smarter and better at identifying trends than they are given credit for.
60: Thank you for setting the record straight. According to quarterly reports filed by US brokers with the CFTC, about 38% to 43% of all trader accounts are profitable, depending on the broker. This seems to debunk the myth that 90% or 95% of traders lose money.
  • #23
  • Jun 1, 2012 10:22pm Jun 1, 2012 10:22pm
Think about it for a minute ...

The word "important" is an opinion so it doesn't not matter. We have to do it anyway.

You job as a trader is to enter and exit a position

You don't enter you have no opportunity

You don't exit you can't close the trade

Keep it simple
  • #24
  • Jun 1, 2012 10:57pm Jun 1, 2012 10:57pm
Quoting Slim Buffett
Maybe. But if the truth is (as has been proven) that humans fear losing money more than they desire to gain money then it's a different situation than simply picking tops or bottoms.

When someone picks a trade they are more likely to hold on to a losing trade in fear of loss.
They are more likely to cut a winning trade short for fear that it may turn into a loss.

That's the gist of it.
Right, I agree. Thats why, in my opinion, from a purely psychological perspective, entries are actually more important. A good entry makes it much more likely that you will hold onto a winner if price moves decisively in your direction. The fear of loss dissipates once you have a comfortable buffer of profit, and you are more likely to allow a trend to develop or not develop or continue or not continue, and I think puts you in a better position to make good decisions, and choose better exits.

But, from a purely technical standpoint, entries and exits are still the same thing imo.

The stats that 60minuteman quoted, tells me a slightly different story than what they are claiming. I think the typical retail trader enters late and without confidence, probably based on a signal from a lagging indicator in a weak system, maybe get a few points of profit before price starts ticking back against them, the fear of loss takes them out of these trades because the entry was late, the system is bad and they have no confidence in it, their stop is most likely right below the previous low or high, which is still much farther away than their current profit, and they don't want to lose what little they currently have.

bad late entry in a weak system = paralyzing fear
good entry in a strong system you have confidence in = manageable anxiety
  • #25
  • Edited Jun 2, 2012 4:46am Jun 1, 2012 11:37pm | Edited Jun 2, 2012 4:46am
Quoting wallstreet03
have you an good method ?
when exit ?
There is not necessarily a one-size-fits-all answer to such a general question. It depends on many factors, one being your trading horizon: for example (and to state the obvious) taking profit at 3x the average daily range is not going to suit a scalper.

If trading with the backing of a strong trend, be more willing to let the whole position run as long as possible. In the case of a really strong trend, look to pyramid your positions, also, as participation becomes more important, and timing less so.

If trading a counter-trend pattern, or across a sideways market (e.g. channel), look to take profit more quickly, preferably at the most likely points of price reversal, e.g. S/R confluences. Timing (of both entries and exits) is very important.

Numbnuts makes a great point here, IMO. With trade management, unless your decisions have statistical or technical basis, they are effectively nothing more than a 'feel good' measure. It's arguably better to set your exit points at the time of entry, when there is less emotional pressure. Then, unless the trading landscape — from the standpoint of your proven rules — has changed since the time of your entry, there's no logical justification for micromanaging the trade.

As to whether entries or exits are generally more important, I agree with Custos, at least from a mathematical standpoint: both are nothing more than adjustments to your net position.
  • #26
  • Edited 3:04pm Jun 2, 2012 7:50am | Edited 3:04pm
I assume it's only because the momentum is easy to spot so entry is pretty straightforward for a momentum trader but an exit isn't....
  • #27
  • Jun 2, 2012 8:29am Jun 2, 2012 8:29am
Exits are not independent of entries. Their importance varies inversely. Great entries can do with ok exits, but ok entries will require great exits.

Just my 2 pips.
"To hold, you must first open your hand. Let go." - Lao Tzu
  • #28
  • Jun 2, 2012 10:12am Jun 2, 2012 10:12am
Exit and entry is important. Even risk to reward ratio is good, this could become losing in the end due to probability issue.

Example:
Risk to reward ratio = 1:2
Probability target to stop ratio = 1:2

Final outcome = Zero return due to hitting stop frequently.
  • #29
  • Jun 2, 2012 11:11am Jun 2, 2012 11:11am
this is only an example how I define the importance of an entry:

The big move up has given me an range(zone) point A
At point B the price has retrace 50% down from the high of the big move.
At point B I alredy know some informations:
-The high / low of the move A gonna be broken in the future
-at point B my RR is 1:1

So this means that when i want to go long the entry has to be at or below point B where the max that the price can go down is the low of my range(RR 170:1 when its go back to the high )
Attached Image (click to enlarge)
Click to Enlarge Name: eurusd.JPG Size: 89 KB
  • #30
  • Jun 2, 2012 2:33pm Jun 2, 2012 2:33pm
Quoting Gollum99988
this is only an example how I define the importance of an entry:

The big move up has given me an range(zone) point A
At point B the price has retrace 50% down from the high of the big move.
At point B I alredy know some informations:
-The high / low of the move A gonna be broken in the future
-at point B my RR is 1:1

So this means that when i want to go long the entry has to be at or below point B where the max that the price can go down is the low of my range(RR 170:1 when its go back to the high )
ranges get broken all the time
tradewith60
  • #31
  • Jun 2, 2012 3:16pm Jun 2, 2012 3:16pm
I think you have missed my point...
  • #32
  • Jun 2, 2012 5:29pm Jun 2, 2012 5:29pm
if we look at this in its most simplistic form,it becomes much easier.

lets use cable as our example,whe price was trying to climb into the mid 160 is,

failed to make new highs,regardless to my or your perspective,the daILY CHART WAS indicating a lack of strenth.fundementally it was inpossible to buy ,with a longer time perspective.if your veiw point was longer term,your stop would be above the highist high,as inportant as your forcasted exit point.point to point trading.you must have concidered your exit otherwise you should not have made your entry,

if you dont know what your motive for your trade is,then over time you will loose money.you cant trade unless you understand this,i like to get the best possible entry,because my objective is minimal risk with high percentage hit ratio,

unfortunatly its not an open book,we really need to know our objective ,and its very possible.theres only 2 points of travel.entry and exit ,if you dont see those 2 points dont enter
  • #33
  • Jun 2, 2012 6:08pm Jun 2, 2012 6:08pm
Quoting Aldente
The fear of loss dissipates once you have a comfortable buffer of profit, and you are more likely to allow a trend to develop or not develop or continue or not continue,
You make some good points. But it could be said that once the fear of loss dissipates, it's time for greed to kick in and you hold a winning trade much longer than you should have. Again, that's where fear of loss comes into play. You have $xxxxx in profit and you don't want to lose any of it.
It's a balance I suppose.

Quoting Aldente
bad late entry in a weak system = paralyzing fear
good entry in a strong system you have confidence in = manageable anxiety
That's very good.

And a great exit means you've put the money in your pocket. Anxiety over?
When the Joker is in the deck.. fear not and play it well
  • #34
  • Jun 2, 2012 7:14pm Jun 2, 2012 7:14pm
Quoting Slim Buffett
But it could be said that once the fear of loss dissipates, it's time for greed to kick in and you hold a winning trade much longer than you should have.
Heh, that is certainly the other side of the coin that I didn't bring up, because I am the most guilty of it. I am generally a fearless trader but I am terribly, terribly greedy. That greed has also served me quite well at times. It IS a balance, and something I am continually trying to fine tune.
  • #35
  • Jun 2, 2012 7:21pm Jun 2, 2012 7:21pm
Quoting Aldente
Heh, that is certainly the other side of the coin that I didn't bring up, because I am the most guilty of it. I am generally a fearless trader but I am terribly, terribly greedy. That greed has also served me quite well at times. It IS a balance, and something I am continually trying to fine tune.
Very well said. We just have to keep working on it.

That's all we can do.
When the Joker is in the deck.. fear not and play it well
  • #36
  • Edited 9:28am Jun 3, 2012 7:12am | Edited 9:28am
for me its completely dependent on the instrument and how its tracking with the rest of the larger more liquid instruments

but risk and profit is decided upon order entry.
exit is a different beast and independent

there will be times when i will just want to take profit at levels I find fitting.
only to wait for price to come back to my same levels and put it back on for different sizes just one example

I strictly trade ranges

I would argue they are both equally important
  • #37
  • Jun 3, 2012 8:42am Jun 3, 2012 8:42am
Air & Water..
Which one is more important?
  • #38
  • Jun 3, 2012 9:36am Jun 3, 2012 9:36am
Quoting wallstreet03
Exit is more important than the entry...
How manage your trades ?
have you an good method ?
when exit ?
thank you
IMO
EXITS will ALWAYS will more important than ENTRIES
...is the answer to your first question
All other questions are non-specific and vary.

To explain what i said above, in simple terms...
A trade is successful when its profitable (or closed in profit) & thats the ESSENCE of Trading ..trading profitably!

If one is able to book out or EXIT (rests without any position) in profit, nothing else matters for a TRADER ..whatever/wherever was his/her ENTRY
(Simple coin toss entry and then managing and then EXITING in profit is one of the best ways you develop your trading abilities (manual trading abilities generally))
Crap ENTRIES can be made and can then be followed by managing it effectively(say hedging/scaling out/reversing etc) and then EXITING in profit..proves the same !


Hope this helps
100 Fold Challenge->Interested? ->https://www.forexfactory.com/thread/32152
  • #39
  • Jun 3, 2012 10:26am Jun 3, 2012 10:26am
Quoting forexsaint
IMO
EXITS will ALWAYS will more important than ENTRIES
...is the answer to your first question
All other questions are non-specific and vary.

To explain what i said above, in simple terms...
A trade is successful when its profitable (or closed in profit) & thats the ESSENCE of Trading ..trading profitably!

If one is able to book out or EXIT (rests without any position) in profit, nothing else matters for a TRADER ..whatever/wherever was his/her ENTRY
(Simple coin toss entry and then managing and then EXITING in profit is one of the best ways...
coin toss entries and simply managing the trades won't lead to long-term profits.
  • #40
  • Jun 3, 2012 11:56am Jun 3, 2012 11:56am
mmhhhh.....chicken and egg...
wo-yoy! wo-yoy! wo-yoy! wo-yoi! wo-yoy-yoy-yoy!
0 traders viewing now