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Ok as I indicated yesterday I want to try this for a while and see how it goes. Some questions may be pertinent to you at the time others perhaps not. We can always do with a reminder though from time to time
“Hi Chris
Writing to you in desperation! I generally follow James’ G7 system, so entry points have become very clear to me. The part that I’m battling with is when to exit a trade. I’ve had so many instances when I have held on to a trade only to find it turn on me and worst case scenario hit my SL. So now I’m afraid to stay in trades. I always seems to get out of beautiful big winning trades (in hindsight of course!) way too early!
I understand aiming for fibs/ S/R lines etc but still battle to stay in trades and let price go to these areas. As soon as I think the trade is looking dodgy I close it for a small profit only to kick myself later when I see I could have attained 100+ pips. I always trade with a SL and I always set a reasonable and logical TP. How do I know when to let the trade run to TP and when to bail? Another thing……….do you only ever manually close your trades/check your trades at the top of the hour? How do you manage your trades? Please help!!
Trader C.”
My reply was…
Hi C, you must not beat yourself up to much. If you watch James in the charter group, he does this himself all the time – BUT – you don’t notice because he doesn’t mention it. The reason is that, as with predicting anything, one cannot predict an exit anymore then you can predict any other aspect of trading. So, you have to learn to take what you get, as long as you have done your best to figure out the best possible and most logical exit areas, and aimed for those, then there is simply nothing else to do. Whatever ‘actually’ happens during the trade then is not your doing and therefore nothing that you need stress about.
James for example, is comfortable with his trading and understands these variables better then most – so he takes what he gets and moves on – he doesn’t waste any energy on “what if” scenarios.
There are various options available, but it sounds as if you are familiar with most so I won’t go into them, but purely for a reference point think of some of these scenarios and I bet that you can identify with them all.
If you were to use a trailing stop for example – you will find that quite often you are just stopped out by just a few pips by a slightly bigger retrace then normal, and the price does then eventually hit your profit target. If you wait for a retrace and hide behind the next low, then you can quite often find the market actually reverse and you are way down on profit before you realise that maybe that was a reversal candle and so perhaps you should have gotten out at the top near that resistance area. Quite often it simply does not get to the next level at all. More often then not, it does though, and so just take the ones you get and move on from those that you don’t get.
Can you see the conflict? It really is not a science at all. You need to try the various options available to you and then monitor which gives you better results, knowing full well that at times, another strategy might have given more. You need to find the exit strategy that you are most comfortable with and simply stick to that. Or, if you are experienced enough, then depending on the market conditions, you may want to use a different strategy at times under different market conditions. The last point though is not advisable unless you are experienced and quite comfortable with the outcome. If you attempt this too early in your trading career then once again you will find yourself questioning whether that was the right decision at the time – as you are doing now.
Rules are rules and variables are variables – just remember this. There is nothing wrong with placing a 20 pip stop loss today and a 50 pip tomorrow. As long as you have applied your rules of the stop being within the same ‘risk parameters’…in other words if you need a larger stop then adjust your number of lots traded so that you are within the same risk exposure parameters as laid out in your rules…but the variables of actual ‘size of stops’ – that is always dependent on market conditions (last obvious low etc).
I hope that this enables you to start accepting the inevitable – that you cannot be right all the time – and that you cannot control the outcome – ever!
Just learn to go with the flow more this year – accept the outcome and move on – take the good ones and along with those – learn to take the bad ones as well
Cheers,
Chris.
P.S. Remember the basic rules of exiting a trade…
1. Firstly, an effective initial stop should be place where you don’t expect the market to go (behind the last low etc) and if it does, then the premise of the trade is over and you should rather exit the trade with a small predetermined loss.
2. Never move stops once in a trade to attempt to stay in a trade longer…once past your initial stop, then market conditions have now changed to a point where your original analysis now no longer applies, hence, neither do your original trade parameters.
3. Next a decent exit strategy is required to ensure that you do not react emotionally to a trade once you are in it. That is why they are critical to determine before you actually enter your trade. Their main aim is to strike a balance between protecting open profits as much as possible and to prevent you from exiting the trade too soon (normally an emotional decision at the time). Which exit strategy you decide to use will depend on your actual trading system.
“Hi Chris
Writing to you in desperation! I generally follow James’ G7 system, so entry points have become very clear to me. The part that I’m battling with is when to exit a trade. I’ve had so many instances when I have held on to a trade only to find it turn on me and worst case scenario hit my SL. So now I’m afraid to stay in trades. I always seems to get out of beautiful big winning trades (in hindsight of course!) way too early!
I understand aiming for fibs/ S/R lines etc but still battle to stay in trades and let price go to these areas. As soon as I think the trade is looking dodgy I close it for a small profit only to kick myself later when I see I could have attained 100+ pips. I always trade with a SL and I always set a reasonable and logical TP. How do I know when to let the trade run to TP and when to bail? Another thing……….do you only ever manually close your trades/check your trades at the top of the hour? How do you manage your trades? Please help!!
Trader C.”
My reply was…
Hi C, you must not beat yourself up to much. If you watch James in the charter group, he does this himself all the time – BUT – you don’t notice because he doesn’t mention it. The reason is that, as with predicting anything, one cannot predict an exit anymore then you can predict any other aspect of trading. So, you have to learn to take what you get, as long as you have done your best to figure out the best possible and most logical exit areas, and aimed for those, then there is simply nothing else to do. Whatever ‘actually’ happens during the trade then is not your doing and therefore nothing that you need stress about.
James for example, is comfortable with his trading and understands these variables better then most – so he takes what he gets and moves on – he doesn’t waste any energy on “what if” scenarios.
There are various options available, but it sounds as if you are familiar with most so I won’t go into them, but purely for a reference point think of some of these scenarios and I bet that you can identify with them all.
If you were to use a trailing stop for example – you will find that quite often you are just stopped out by just a few pips by a slightly bigger retrace then normal, and the price does then eventually hit your profit target. If you wait for a retrace and hide behind the next low, then you can quite often find the market actually reverse and you are way down on profit before you realise that maybe that was a reversal candle and so perhaps you should have gotten out at the top near that resistance area. Quite often it simply does not get to the next level at all. More often then not, it does though, and so just take the ones you get and move on from those that you don’t get.
Can you see the conflict? It really is not a science at all. You need to try the various options available to you and then monitor which gives you better results, knowing full well that at times, another strategy might have given more. You need to find the exit strategy that you are most comfortable with and simply stick to that. Or, if you are experienced enough, then depending on the market conditions, you may want to use a different strategy at times under different market conditions. The last point though is not advisable unless you are experienced and quite comfortable with the outcome. If you attempt this too early in your trading career then once again you will find yourself questioning whether that was the right decision at the time – as you are doing now.
Rules are rules and variables are variables – just remember this. There is nothing wrong with placing a 20 pip stop loss today and a 50 pip tomorrow. As long as you have applied your rules of the stop being within the same ‘risk parameters’…in other words if you need a larger stop then adjust your number of lots traded so that you are within the same risk exposure parameters as laid out in your rules…but the variables of actual ‘size of stops’ – that is always dependent on market conditions (last obvious low etc).
I hope that this enables you to start accepting the inevitable – that you cannot be right all the time – and that you cannot control the outcome – ever!
Just learn to go with the flow more this year – accept the outcome and move on – take the good ones and along with those – learn to take the bad ones as well
Cheers,
Chris.
P.S. Remember the basic rules of exiting a trade…
1. Firstly, an effective initial stop should be place where you don’t expect the market to go (behind the last low etc) and if it does, then the premise of the trade is over and you should rather exit the trade with a small predetermined loss.
2. Never move stops once in a trade to attempt to stay in a trade longer…once past your initial stop, then market conditions have now changed to a point where your original analysis now no longer applies, hence, neither do your original trade parameters.
3. Next a decent exit strategy is required to ensure that you do not react emotionally to a trade once you are in it. That is why they are critical to determine before you actually enter your trade. Their main aim is to strike a balance between protecting open profits as much as possible and to prevent you from exiting the trade too soon (normally an emotional decision at the time). Which exit strategy you decide to use will depend on your actual trading system.