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Your exit is more important than your entry?

  • #21
  • Sep 16, 2013 4:29am Sep 16, 2013 4:29am
Quoting Ishtana
{quote} Your entry can be random? I find it hard to digest. The purpose of all proper trading system is to find the right entry at the market. With a random entry, you're leaning more towards gambling than analysis. One of my goals in forex is to create profit, and I've learned enough now that in trading NOTHING can be left to chance. The more randomized your every part of trading is, the more risk you introduce to your trading. Every trade must be calculated and analyzed, anything else is gambling. And making a random entry is disregarding your...
Well, my entries are not random at all. My entries are precise and exits also. Like I said before, I use MAs and MACD. My entries and exits are on my MACD while the MA is used to know the market condition (trending or ranging) I am in.

I wouldn't want to say more than this as it will take loads of time for me to explain. But for your convenience, you can look at the picture on my profile page to have a glimpse of what am talking about.

Trade well
  • #22
  • Sep 17, 2013 9:00am Sep 17, 2013 9:00am
My entry level is Indicator signal only because indicators signals are very important to trade successfully.
  • #23
  • Sep 17, 2013 9:17am Sep 17, 2013 9:17am
It's like life and death. Entry and exit does not exist separatly.


I try to put a SL at BE rapidly after an entry. And then progressivly move SL with profits. I try to keep my account alive and never have a trade in profit that turn in loss.
but this is easier to say than to do...
Bottomless wonders spring from simple rules, which are repeated without end
  • #24
  • Sep 17, 2013 9:22am Sep 17, 2013 9:22am
Quoting limprobable
It's like life and death. Entry and exit does not exist separatly.
If you want to compare with entry and exit, I would say like birth and death.

Life is between and can be compared to how you manage the trade between the entry and exit.
MT4/MT5 EAs/Indicators/Alerts coder
  • #25
  • Sep 17, 2013 2:55pm Sep 17, 2013 2:55pm
Quoting Smokeymar
Why can't they be equally important?
They are equally important, regardless of what most say or think. Entries and exits are not independent of each other, so logically how can one be more important than the other?

Don't take what anyone says in a internet forum blindly. Don't take what I say blindly. In order to properly educate yourself question everything, question everyone.
"To hold, you must first open your hand. Let go." - Lao Tzu
  • #26
  • Edited 4:59pm Sep 19, 2013 4:40pm | Edited 4:59pm
Hi Dear all,

After 20 minutes of reading each of your post, frankly, I must say, yet, no one has grasped the importance of exit, in detail.

As for my opinion, exit is far more important than entry. Below would be the some of the key reasons in general,

1. In a trade, entry does NOT determine your profit or lose, but exit does.
In the market, nearly everything is possible in the next second. Doing the right thing would NOT give you return at all time, and doing the wrong thing would NOT grant you a lost either. But one thing is always true, how well you execute your exit is the key factor in a consistent growth.

In this case, exit > entry


2. Now, let’s talk about consistent growth. In order to have a consistent growth one must execute your trade at an ideal risk / reward ratio (i would say at least 1:1 ratio). In other words, before every trade, you must look where your reasonable target (reward, exit) is to determine if the entry (risk) is worth to take. In this case, before every trade, exit has a higher priority on making the trade decision than entry.

Again, exit > entry

3. Let’s move onto the emotional side of trading. Let me ask you how many of you and your friends stuck in the losing trade(s) and ended up killing the account a while later in FX? This is called passive loser who hopes time will turn loser into winner. It works once or twice, but never work for the long run. Why this happened? Because he entry without a exit plan, and the emotional pain of losing caught him. now let me ask you again, would you make a exit plan BEFORE entry when you have no risk, or would you make a exit plan AFTER you jump in the market along with you emotional sideeffect(s)? I would pick the first option, and I hope you and your friends do the same.

Again, exit > entry


4. Lastly, this is just the recap on what I stated above. Having a clear thought exit plan before entry when you have ZERO risk (since you are not in the market) would give you so much more confident on execute your trade. It’s almost effortless after trade is made following this rule, and you know when something goes wrong you would get out within your comfortable level without any hesitation. No panic, no emotion, just close the loser because you already have it planned before you entry.

Again and again, exit > entry


okay, I believe this is pretty much everything you need to know about why exit is more important than entry unless you have anything to add.


And oh yeah, exit is far more difficult to master, probably 10 times harder than entry. If you would like to know why it is so much more difficult, let me known, or I wouldn't spend another 20 minutes writing things no one interested.

Thanks and enjoy.

JS
  • #27
  • Edited 9:20pm Sep 19, 2013 9:07pm | Edited 9:20pm
Quoting JuneStorm
Hi Dear all, After 20 minutes of reading each of your post, frankly, I must say, yet, no one has grasped the importance of exit, in detail. As for my opinion, exit is far more important than entry. Below would be the some of the key reasons in general, 1. In a trade, entry does NOT determine your profit or lose, but exit does. In the market, nearly everything is possible in the next second. Doing the right thing would NOT give you return at all time, and doing the wrong thing would NOT grant you a lost either. But one thing is always true, how well...
I prefer to understand entries and exits in terms of simple logic and probability. I'm not very good at explaining things but I'll try my best. There are 2 important points to be addressed.

Entry vs. Exit:

If no entry (A) then there can be no exit, be it take profit (B) or stop loss (C). This is the same as saying entries and exits do not exist on their own separately. They are dependent. If A is true then necessarily either B or C are true, or if either B or C are true then necessarily A is true.

Trading vs. No position:

Trading obviously implies what was mentioned above, whereas having no position does not. However, the argument open position at point A (ie, trading) can only be valid assuming the likelihood of price moving from there to point B is greater than price moving to point C. That is, A is true if and only if the probability of B given A > probability of C given A. As in 'entry vs. exit' we find dependency. Moreover, a relation between conditional probabilities defines when to trade and when to stay on the sidelines.

Conclusion:

I'm sure everyone has one.

EDIT: I've intentionally skipped the case where a higher R:R justifies the entry for simplicity sake, but the logic used remains valid. It's just a matter of adding 'OR'. Although, Junestorm's post was quoted, this post is intended as food for thought for anyone who thinks entries and exits do not have the same importance.

My 2pips anyway
"To hold, you must first open your hand. Let go." - Lao Tzu
  • #28
  • Sep 20, 2013 5:54pm Sep 20, 2013 5:54pm
You need to think about entries/Exits in term of the mathematical expectancy of trades -- in terms of statistics. The maximum favorable excursion (MFE) and the maximum adverse excursion (MAE).

Your entries determine your MFE and MAE, therefore your mathematical expectancy (the probability of price moving X pips after you entered in your favor or against you after Y bars)

Your exits should simply cash on your mathematical expectancy. Maximize the probability that on average you will be able to capitalize on the edge given to you by your entry.

The entry gives you the edge (the above average chance of a favorable excursion larger than an adverse excursion). The exit helps you capitalize on this edge in the most efficient manner.

The entry is more important because if your entry has a positive mathematical expectancy it will make money even on random exits (provided that the mathematical expectancy remains positive at the exit time horizon). This is a statistical FACT.

It's all in the statistics! As most traders on this forum, you would have things much easier if you focused more on learning statistics and deriving facts from them than going into endless speculation about what might be more important.
  • #29
  • Sep 20, 2013 6:48pm Sep 20, 2013 6:48pm
Quoting erik1
You need to think about entries/Exits in term of the mathematical expectancy of trades -- in terms of statistics. The maximum favorable excursion (MFE) and the maximum adverse excursion (MAE). Your entries determine your MFE and MAE, therefore your mathematical expectancy (the probability of price moving X pips after you entered in your favor or against you after Y bars) Your exits should simply cash on your mathematical expectancy. Maximize the probability that on average you will be able to capitalize on the edge given to you by your entry. The...
The same argument can be applied to say exactly the opposite:

The exit is more important because if your exit has a positive mathematical expectancy it will make money even on random entries (provided that the mathematical expectancy remains positive after the entry time horizon).

Now what do you make of that? Can both statements be true?

Like a stubborn old man, I must maintain that entries and exits are equal in terms of importance. The success of the entry can only be measured by the success of the exit, and the success of the exit can only be measured by the success of the entry. One cannot measure how good an entry, or exit, is in and by itself. One can only say one is good in relation to the other.
"To hold, you must first open your hand. Let go." - Lao Tzu
  • #30
  • Sep 20, 2013 7:05pm Sep 20, 2013 7:05pm
Quoting vox dei
{quote} One can only say one is good in relation to the other.






all the best
When the Joker is in the deck.. fear not and play it well
  • #31
  • Sep 20, 2013 7:31pm Sep 20, 2013 7:31pm
VOX DEI and Erik1,

Do you guys actually trade before make these comments?

Seriously, do me a favorite and answer this question,

Why would the same system gives different result to different users? even the simplest system with the simplest entry rules might work well for someone, but horribly wrong for another??? WHY????

Here is my answer to you, it's because ppl execute the exit incorrectly due to their personality and emotional limitation of handling winners and losers.

So before each trade is made, trader must make sure he must able to execute the exit at his comfortable level in order for the entry and the whole system to work.

Like i said, you can close your eyes and make a trade, the chance is it would become a winner, and how do you execute your exit determine if its loser or winner. this can be applied for every single trades.

It's the poorly execution failed the system, entry is never hard.

Of course, if you don't trade or trying out system over and over, you won't know this fact but to say both entry and exit are important. Well, in this sense, so does your broker and internet connection at home.
  • #32
  • Sep 20, 2013 7:50pm Sep 20, 2013 7:50pm
Quoting JuneStorm
it's because ppl execute the exit incorrectly due to their personality and emotional limitation of handling winners and losers.
But they enter correctly??; only the exit is wrong due to personality and emotional limitations. ???

Quoting JuneStorm
So before each trade is made, trader must make sure he must able to execute the exit at his comfortable level in order for the entry and the whole system to work......
Anyone can exit a trade at a "comfortable level" (what does that mean). If you want the "whole system to work" then
I suppose you'd exit when your system/method suggested so. Correct ?? (or not)

I simply don't understand your logic. Pleas educate me.
When the Joker is in the deck.. fear not and play it well
  • #33
  • Sep 20, 2013 8:36pm Sep 20, 2013 8:36pm
Quoting Slim Buffett
If you want the "whole system to work" then I suppose you'd exit when your system/method suggested so.
It should be the case for any trade. A fixed exit (TP/SL in pips) has no logic at all. Any exit should be based on a technical reason.
MT4/MT5 EAs/Indicators/Alerts coder
  • #34
  • Sep 20, 2013 8:50pm Sep 20, 2013 8:50pm
what indicators do you use for exit if i may ask???
  • #35
  • Sep 20, 2013 9:35pm Sep 20, 2013 9:35pm
Quoting FerruFx
{quote} It should be the case for any trade. A fixed exit (TP/SL in pips) has no logic at all. Any exit should be based on a technical reason.
"based on a technical reason." ?? ummmmm...... I'll have to think about that for a minute. .....
OK...... minutes up !!!!

If I were trading a method/system why would I not simply exit according
to said method ??????????

My method may or may not be based on a
"technical reasoning" but shouldn't I continue to practice and "perfect"
a method which I believe to be reliable? (yes, I know what the short answer is").

But really.......... and with all due respect, I don't get the "exit for technical reason" thing.

I might add that I find your views refreshing because they seem to be without
all the "luggage" whether I agree or not.

All the Very Best of Weekends



(I reserve pissing people off from Monday thru Thursday)

When the Joker is in the deck.. fear not and play it well
  • #36
  • Sep 20, 2013 10:01pm Sep 20, 2013 10:01pm
IMO, you don't have to rely on tech indicators, but rather on the ratio of risk:reward.

I do simply 1:1 or even a bit less.

This is a question of probability. Less greedy you are, more probable you get.

Remember, this is a market where 95% of retail traders lose money.
  • #37
  • Sep 20, 2013 10:04pm Sep 20, 2013 10:04pm
Quoting Slim Buffett
{quote} "based on a technical reason." ?? ummmmm...... I'll have to think about that for a minute. ..... OK...... minutes up !!!! If I were trading a method/system why would I not simply exit according to said method ??????????
I think you misunderstood my point.

Exit according to said method is a technical reason. If your method (analysis, signals, etc ...) said to exit, so exit.

My point was that a fixed exit (ie. TP set to 25 pips) isn't a technical reason.
MT4/MT5 EAs/Indicators/Alerts coder
  • #38
  • Sep 20, 2013 10:50pm Sep 20, 2013 10:50pm
Quoting JuneStorm
VOX DEI and Erik1, Do you guys actually trade before make these comments? Seriously, do me a favorite and answer this question, Why would the same system gives different result to different users? even the simplest system with the simplest entry rules might work well for someone, but horribly wrong for another??? WHY???? Here is my answer to you, it's because ppl execute the exit incorrectly due to their personality and emotional limitation of handling winners and losers. So before each trade is made, trader must make sure he must able to execute...
Your question has a number of possible answers, but no real relevance to the topic at hand. You are assuming manual trading is all there is. Just to give you some context, all my trading is automated. No psychology issues with entries or exits whatsoever.

I do agree with you that exits may be psychologically experienced as harder by manual traders (even stated it in a previous post on this thread). The exit is the moment that may materialize a loss, and humans are very averse to losses. A perfect recipe for screwing up the trade outcome, and possibly subsequent trades too. This subjective level is as far as I'm going in saying entries and exits are different. At an objective level like the one achieved via automated trading, entries and exits both have exactly the same importance.
"To hold, you must first open your hand. Let go." - Lao Tzu
  • #39
  • Sep 20, 2013 11:02pm Sep 20, 2013 11:02pm
Quoting vox dei
{quote} Your question has a number of possible answers, but no real relevance to the topic at hand. You are assuming manual trading is all there is.
DUDE !!! I don't think that JS was "assuming" that manual trading is all there is. Most of
us nowadays weren't born in the iCE aGE.


Quoting vox dei
{quote}Just to give you some context, all my trading is automated.
In fact, I'm fairly certain that JS was referring to manual trading so if you know nothing about
that, or what it's like
why are you here. ??
When the Joker is in the deck.. fear not and play it well
  • #40
  • Sep 20, 2013 11:20pm Sep 20, 2013 11:20pm
Entry/exit, hmmmm one thing is to consider First, what type or kind of trader you are, if you are a scalper you trade mostly technical, so you enter and exit on your technical signal, so entry and exit are equal, (but most indicators are lagging, not that that is a bad thing) but on a 1 minute or 5 minute chart it is only noise you are trading anyway....but if you are a swing trader you use both Tech and fundi, probably rely on S/R and maybe 1 or 2 oscillator but your time frame is probably 4 hour, maybe daily and 1 hour, if you use stops they are bigger, entry is important but the exit is what it is all about, the good traders can hang on to a trade and milk it, and YES that takes Years of Trading experience to learn how to EXIT a Trade, it does not have to do anything with fear or greed..... it takes learning the psychology of the market, and to have a somewhat firm understanding of the Fundamentals of the currencies you are trading, but I'm not here to give a lesson in trading we are here to determine Entry and Exit......so i say the entry is fairly easy when you swing trade, but the exit that takes knowledge and you don't learn that in a couple of month, it takes a life time to learn, a couple of swigly lines are not going to do it....
and Long term Trading well that is another kettle of fish but most traders here on this forum are short term traders and some swing traders, so I will leave long term trading alone....
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