Best exit strategy with losing trades

[CriminalBlade]

Hello,

I have a trading strategy which i am working on, I have two years of back testing which is showing reasonable results, But !

The But is simple! I am having trouble working out the best exit strategy. Im looking at 20 min binaries, so if bought £1 per point at say 54/62 and now the price is say 26/34. Im now down 36.

If I sold now I would lose 36, but if I Sold £2 per point I would lose £10. Am I in the long run better off just taking the 36 loss or risk losing if the market turns?

Does anyone have exit stratagies involving other products that reduce the risks I would love to hear them.

Thanks in advance

 

[shadowninja]

You need to decide if your reason for entry is wrong by looking at the underlying.

Anyway, with your idea of selling, what if the market turned again to prove your original trade right?








And then reversed once more?

 

[tomorton]

A wise chap I knew used to say -

you have to ask yourself what is the minimum cost to find out you were wrong to enter, not what is the maximum loss you can stand by being wrong.

Of course, you have to decide a maximum loss so you don't get wiped out on your first bum trade but he also used to say that before the entry you need to concentrate on what you might lose, not how much you might make.

I would add, entries are easy, its the exit that pays you or slays you.

 

[CriminalBlade]

Hello !

A wise chap is always interesting, But a rich chap will definatly be listened to more ! I want to be a rich man which is why im putting alot of effort into this whole subject!

Ive done some maths, My maths does have problems with it, I know that! Its just to get my point accross then hopefully someone will tell me something that will make my maths look even better!

My maths would be alot better if I had the models that the binary trading companies use, Anyone have that who is prepared to share?

Back to my original question.

Do I hold onto my losing trade or do I do something about it?

My Data

8598 20 Minute Periods (FTSE100) .
14 minutes into the 20 minute period 4076 of them are down. 4522 of them are up!
Of the 4076 down periods 734 of them turned and closed up!
Of the 4522 up periods 1415 of them turned and closed down!

If I do nothing
3342 times I would lose 36 = 120312
734 times I would win = 27892

I would have lost £92420

If I Just Got out
4076 times I would lose 36 = 146736

I would have lost £146736

If I Get out and Bet Up
3342 times I would lose 10 points = 33420
734 times I would lose 110 points = 80740

I would of lost £114160

Going on this simple maths my best option is to do nothing that way I would only lose £92420.
I would of won approx £41656 from the 4522 periods what were up 14 mins in.

So, In general I would of been down approx £50764 ! OUCH !!!!!!

This kind of maths was what led me to my question, Does anyone know of a exit stratagy which means no loss ? Or a very small loss ?
Even if it means using a product involving a different time scale or type?

All views welcome!

 

[riwf]

Once you have made the loss, there is no exit strategy to get out of the position without taking the loss. The best way to minimise losses is not to play the five minute, twenty minute, or one hourly bets. Make daily bets, and wait until 2-3 hours before the market closes. In that way, the market is usually able to tell you how to bet. So long as nothing happens after that to shake the market, more often than not you'll win. For example, if you are offered 85/17 on market x closing up in two hours time, take it.

This approach has worked well for me over the last four years or so, with an average strike rate of 93% over that time, giving me around 1,200 points per year. I'm now taking a year off to do some travelling and some studying. I doubt I'll be looking at the markets in that time - it'll be interesting to see where they are when I get back, and how many of the new binary firms that have joined the party in the last year are still around.

Best of luck

RIWF

 

[CriminalBlade]

Time off for a year, Im jealous ! With the markets the way they are right now I think you have picked a good time !

Thank you for the trading tip ! With there being so many items to trade I will definatly check that out.

 

[tar]

up

 

[arabianights]

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