Best Exit Strategies for Forex market ?

[Jason101]

Big topic- For the initial stop loss, I like to scale out as it goes against me.

 

[Jason101]

Big topic- For the initial stop loss, I like to scale out as it goes against me.

Having said that today I added to a losing position, which is the opposite to the above but the right thing for that particular trade.

I don’t think there is a one size fits all, just different probabilities for different situations in different market conditions.

Maybe the answer is more along the lines of being flexible within your parameters to suit your own needs in any given situation.

 

[NVP]

hey all !

thanks for the recent discussion points and big respect to some of the names who have posted so far - let me have a look at whats here

N

 

[NVP]

hey all :smart:

saw an interesting Exit approach on a Bollinger Bandit system the other day (guy called Daniel Fernandez who rights for the Currency Trader magazine - this was in Feb edition)

the exit is triggered from a SMA that Reduces in number per day / bar etc etc

so on opening it would be say at 50sma, and then after x bars it would change to a lower ma 949,45 etc etc) until eventually the ma will catch up withthe real time price and exit

naturally there are other S/L's in place on Entry to extra protect the trade but an interesting approach to closing a trade in profit - or at least signalling that enough is enough

hmmmmmmm
N

 

[NVP]

I use a few different potential exit strategies, depending on whether the market is trending or ranging or getting ready to breakout.

First thing you need to figure out is when do you get your stop to breakeven? Once you can figure that out and systemize it, then you can then proceed to figuring out how to exit properly or trail your stops properly.

Simpler is better. Don't clutter your chart with 10 different technical indicators trying to find your the perfect exit strategy as it will just confuse you. Stick with 2-3 helpful confirming indicators that will provide clarity for your exit strategy.

agreed

Cant remember the person but a very sucessful coach was asked what was the secret of his consistent success across a lot of years and teams..........

The Secret to winning ........is not losing


Corny and hideously misquoted - but probably right

N

 

[wackypete2]

hey all :smart:

saw an interesting Exit approach on a Bollinger Bandit system the other day (guy called Daniel Fernandez who rights for the Currency Trader magazine - this was in Feb edition)

the exit is triggered from a SMA that Reduces in number per day / bar etc etc

so on opening it would be say at 50sma, and then after x bars it would change to a lower ma 949,45 etc etc) until eventually the ma will catch up withthe real time price and exit

naturally there are other S/L's in place on Entry to extra protect the trade but an interesting approach to closing a trade in profit - or at least signalling that enough is enough

hmmmmmmm
N

Very interesting. I do bollinger band set ups. It's a pretty powerful indicator. If you are trading with the trend you can use the opposite b band as a likely stop. If I'm in decent profit I'll move the stop to the 20ma and use that as a trailing stop. This will keep your losses small during ranging markets but will give huge profits during trending action.

BTW, I was reading your correlation thread and downloaded the FXCORRIE ea. I'm going to play with it for a bit.

Peter

 

[cristiano]

Very interesting. I do bollinger band set ups. It's a pretty powerful indicator. If you are trading with the trend you can use the opposite b band as a likely stop. If I'm in decent profit I'll move the stop to the 20ma and use that as a trailing stop. This will keep your losses small during ranging markets but will give huge profits during trending action.

BTW, I was reading your correlation thread and downloaded the FXCORRIE ea. I'm going to play with it for a bit.

Peter

Hi Pete,
Are you refering to the 20 sma or ema?

 

[wackypete2]

Hi Pete,
Are you refering to the 20 sma or ema?

sma.

Peter

 

[NVP]

Very interesting. I do bollinger band set ups. It's a pretty powerful indicator. If you are trading with the trend you can use the opposite b band as a likely stop. If I'm in decent profit I'll move the stop to the 20ma and use that as a trailing stop. This will keep your losses small during ranging markets but will give huge profits during trending action.

BTW, I was reading your correlation thread and downloaded the FXCORRIE ea. I'm going to play with it for a bit.

Peter

hey P

i like envelopes a lot ............BB's , Keltners i'm not fussed

be gentle on the FXcorrelator ....its just a humble strenghtmeter and i've laid a simple set of rules on it using 80ma and 20mas charts and waiting for the yen and usd to line up in the same direction to trade against them

I throw in some Dow correlation as well but sometimes it just adds to the confusion

N

 

[NVP]

sma.

Peter

agreed .................ema's bring a whole loada trouble with them

N

 

[NVP]

hey all

thanks again for this thread.............Exits are critical to success and are certainly the reason for failure

N

 

[NVP]

Hey all

Lance beggs is a price action trader and I am a big fan .......I will not reproduce verbatim his thoughts on exits but they are logical and practical as is all his work and involve

exit strategies must be based on the traders personality and objectives
utilising S/R levels (intially and as trade progresses)
Integrating Target based exits
Watching the market to ensure the entry signals still support the trade
considering multiple trades to blend the above approaches

I think this to me remphasises if traders spent as much time focussing on exit strategies as they do on the entries then they would enjoy a lot more success

N

 

[forker]

it depends on the trade. if you in a trend then the best way to exit is by trailing your stop. on the other hand if you range trading you should have at least 1 set target.

 

[Adamus]

If you've read Al Brooks you'll know that he exits either on a stop placed 1 tick below the signal bar (the bar before the entry bar), or he exits half on a target about the same distance away, leaving the other half to run. He pulls the stop up to break even when the market moves beyond the high of the entry bar.

I think what andycon said in post 13 about moving the target with new signals is very good advice too.

Glad to find something on the forex markets - usually it's always the index traders these days.

 

[NVP]

it depends on the trade. if you in a trend then the best way to exit is by trailing your stop. on the other hand if you range trading you should have at least 1 set target.

1000% agree

N

 

[NVP]

If you've read Al Brooks you'll know that he exits either on a stop placed 1 tick below the signal bar (the bar before the entry bar), or he exits half on a target about the same distance away, leaving the other half to run. He pulls the stop up to break even when the market moves beyond the high of the entry bar.

I think what andycon said in post 13 about moving the target with new signals is very good advice too.

Glad to find something on the forex markets - usually it's always the index traders these days.

hey A

good post.......If I had a Dollar for every newbie that pm's me on my other T2W thread re why I hav'nt provided detailed exit strategies for my systems i'd be a rich man :smart:

I think it has to be tailored to each traders approach and any generic advice is a cop out........hence I dont provide it

if I say "trail it" the market will range for 4 days.....If I say "target it" the market will then trend for 2,000 pips up !!

N

 

[NVP]

Round numbers and s/r levels, prior highs and lows.

Or

Try a two candle trail, 1 candle with very sharp moves, tighten up sharply if you get a strong reversal signal. I do everything on the close.

sounds like a plan

N

 

[Adamus]

I've been trying out the Al Brooks 50:50 target:trailing stop approach over the last few days and so far it appears to provide the best of both worlds.

Once you get the trade going well in your direction, then pull up the initial stop to break-even and set a target for half your lot size. If your target is hit, that was the easy bit - the hard bit is knowing how best to trail your stop on the remaining position.

I tried leaving it to run for ever (still trying that out ), trailing 15 points, trailing a volatility based number of points, exiting when the 20 bar EMA catches up etc. This question for me is wide open.

 

[NVP]

hey A

agreed - splitting 50/50 (or whatever % suits) is definitely the best of both worlds and can also be applied to entry methodology as well of course

yes its advanced stuff and not suitable for newbies but these kind of Discussions alongside MM are for me where the holy grail is for profitable trading vs finding the next great indicator/signal

N

 

[barjon]

Someone way back in this thread mentioned re-entry and I think it's worth pursuing that. It seems to me that in the same way that a goodly few have a well thought out entry strategy, but a loose (or non-existent)exit strategy, so do people not bother with a re-entry strategy and just bemoan the "what could've been" if they'd stayed in.

imo peoples' plans should encompass all three strategies - entry, exit and re-entry. You might think of re-entry as a new trade, but it may not necessarily be based on your primary entry set-up, so it's really a different beast. For example, if your entry was based on reversal and you've used a similar set-up for your exit, then your re-entry strategy may well be break-out based (maybe around where you'd be putting your stop-loss if the reversal based exit had been a fresh trade )

good trading

jon