The exit of a trade: how? when? where?

[jacinto]

Thanks for the contribution!
My question to you: did you exit your position at that particular point all at once (meaning no scaling out)?

Also on the one chart you use candles on the other one bars, do you give any special meaning to the means or representation (or is it just me being a pain in the ass )

hi FW,

yes, scaled out 50% at the 166.50 level

and regarding candles or bars, im indifferent. they give me different information on their own. candles highlight the body open and close but miss on the hi-low, whereas bars do the opposite. i get a sensation of momentum with the size of the bars or the body of the candle. so, can trade with both, get the same info from both, but prefer bars. i sometimes post charts with candles such that it is much more visible.

j

 

[daytradingworks]

short term

day trading.

just how i do it.

entry
never trade off ,market orders stops or put limits into the market. especially when using internet brokers.
never trade on your trigger price. always try a retracement. i normally enter over three positions. there are a few other things i look at but this is about exit.

exit the trade.
the trade is. the entry point. risk amount or stop and objective. that is a trading signal.
unless you have all three you dont have a trade.
if you are trading, lets say just 1 lot or one of these internet currency amounts, then entry and exit r limited. but........
as a rule of t humb i start liquidating at 80 pct of my objective. 50 pct of all the position must me closed at objective level. if my level is hit due to news then all the position is closed. if a spike drives the price thru my objective i will still close 50 pct
and then raise a stop for the remaining balance at my objective level.

i adapt the rules depending on who i am trading with. small trades i use internet brokers and larger trades i use a main stream broker.

 

[firewalker99]

day trading.

just how i do it.

entry
never trade off ,market orders stops or put limits into the market. especially when using internet brokers.
never trade on your trigger price. always try a retracement. i normally enter over three positions. there are a few other things i look at but this is about exit.

exit the trade.
the trade is. the entry point. risk amount or stop and objective. that is a trading signal.
unless you have all three you dont have a trade.
if you are trading, lets say just 1 lot or one of these internet currency amounts, then entry and exit r limited. but........
as a rule of t humb i start liquidating at 80 pct of my objective. 50 pct of all the position must me closed at objective level. if my level is hit due to news then all the position is closed. if a spike drives the price thru my objective i will still close 50 pct
and then raise a stop for the remaining balance at my objective level.

i adapt the rules depending on who i am trading with. small trades i use internet brokers and larger trades i use a main stream broker.

thanks for your input, care to post a chart example?

 

[Splitlink]

day trading.

never trade on your trigger price. always try a retracement. .

I try to do that but I find it difficult. It is true that it, often, comes back when the price has been triggered. I guess its a question of never chasing share prices.

Split

 

[Splitlink]

If I had taken your advice Trade 1 would not have happened, but I was sure that today would be a down day and thought that that was the high point.

Trade 2 was early, I could have got in cheaper and with less worry about whether it would come right.

Maybe I will do better tomorrow!

Split

 

[Lightning McQueen]

If I had taken your advice Trade 1 would not have happened, but I was sure that today would be a down day and thought that that was the high point.

Trade 2 was early, I could have got in cheaper and with less worry about whether it would come right.

Maybe I will do better tomorrow!

Split

Hi, me again with me ma's :cheesy:

First of all nice one Split for putting up actual trade examples, I had a quick look today, overlaying part of my strat with some interesting results.

Trade 1, from my view I cant see a reason to short around the 10:00 bar as its just bounced off Ma support on a 15 min chart with the RSI in buy mode.

Trade 2, thats cool, but as you say a little early, its hit Ma overhead resistance, given an aggressive sell on the RSI @ 12:30, with a conservative sell a bit later @ 13:30 on a 15 min chart.

Im posting an hourly chart to try and illustrate the bigger picture on the days trend. I will follow up this post soon in my thread simple moving average system over in the free systems forum, exploring this strat in greater detail for everyone's amusement.

Lightning

 

[Splitlink]

Hi Don,

Thanks for the post.

When I was at sea, the Geordies used the expression "He's got a cob on, this morning" Well, that described my mood the other day when I swore off index trading (yet, again). However, that was a passing phase and the "cob" whatever it is, got thrown out.

The reason that I shorted at 1000, yesterday, was not a chart reading, rather than I was looking for the market to short after the sharp drop on the Dow the previous day.

Today, I've made 13 points on 4 trades. I started late this morning. With yeaterday's rise on Dow, I was bullish. The first trade should have been good but let my profits slide; I should have shorted when I closed T1. Trade 2 didn't work. The afternoon ones were good, but I closed T4 too early. Some one said that the last 30 mins were better out. I'm on holiday this month and this is the first week that I can catch afternoon trading, so will excuse myself for that!

Hope this helps in some way. I've decided to increase my stop distance to try to find the optimum distance. 5 points is a bit tight, I feel.

Good trading

 

[Lightning McQueen]

Excellent stuff Split, glad to see your still in the game, thanks for your chart and trades. Regarding your comment on stops, Im still chasing the nirvana that is a good trade from the off, not quite got the knack of this yet, not sure if its even achievable but in my live trades any sideways action after entry and I stop out, trouble is every entry I take...thereafter the price goes sideways ...as you know Im reading How To Trade In Stocks..J Livermore and Trade Like Jesse Livermore..R Smitten, to glean some info as he alludes to this entry strategy.

Im watching my strat live and am very encouraged by what im seeing, hopefully get some time next week for some serious paper trading, to sort entries.

I've been watching the latest buy signal @ 14:45 head on up into the clouds, hit Ma resistance on a higher time frame and stall, the higher time frame giving an excellent target and exit area. all dovetailing quite nicely with a sell signal in the system.

Have a good holiday and good all day trading.

Lightning

 

[firewalker99]

Hi Don,

Today, I've made 13 points on 4 trades. I started late this morning. With yeaterday's rise on Dow, I was bullish. The first trade should have been good but let my profits slide; I should have shorted when I closed T1. Trade 2 didn't work. The afternoon ones were good, but I closed T4 too early. Some one said that the last 30 mins were better out. I'm on holiday this month and this is the first week that I can catch afternoon trading, so will excuse myself for that!

Hope this helps in some way. I've decided to increase my stop distance to try to find the optimum distance. 5 points is a bit tight, I feel.

Good trading

In current market volatility a 5 point stop for FTSE is way too tight in my opinion. You need something like 10-15 points. I think this is a good chart example (thanks for the contribution to this thread by the way), because it illustrates how exits can really make the difference.

Your 3th trade seems the best, it's also at a place where I would enter although I'd probably already be in after that strong hammer at 1430. If you look back to the day before you see that's where price reversed temporarily so it constitutes potential resistance that now became support. So a strong hammer at that level followed by an upbar would definitely make me pull the trigger.

So suppose you are in from that level or even a bit higher it doesn't really matter, because that trade alone could've made you about 100 points. It's not on your chart but I've attached the whole day because the "big move" didn't happen until late. But it was definitely worth waiting for. So how would you (or anybody else) have managed the trade (trailing stop? how close, why?). Just staying in till EOD would've done nicely though, but it's not always that easy... :?:

 

[firewalker99]

Excellent stuff Split, glad to see your still in the game, thanks for your chart and trades. Regarding your comment on stops, Im still chasing the nirvana that is a good trade from the off, not quite got the knack of this yet, not sure if its even achievable but in my live trades any sideways action after entry and I stop out, trouble is every entry I take...thereafter the price goes sideways ...as you know Im reading How To Trade In Stocks..J Livermore and Trade Like Jesse Livermore..R Smitten, to glean some info as he alludes to this entry strategy.

Hi Lightning good to see you're still in the game.

If each of your trade disolves into a sideways pattern you might have something good in your hands without realizing it. A sideways consolidation pattern usually leads to a strong directional move. Obviously knowing which direction can gain you much benefits, but I suggest that if you get stopped out too often the problem is just your stops and not the method per se... Forgive me if you feel that I'm talking out of the blue. For better comments show me some charts

Cheers,
fw

 

[firewalker99]

entry
never trade off ,market orders stops or put limits into the market. especially when using internet brokers.
never trade on your trigger price. always try a retracement. i normally enter over three positions. there are a few other things i look at but this is about exit.

However if you know where most of the action takes place (buying or selling) then all you have to do is wait till price comes your way and a limit order will actually come very in handy. There won't always be a retracement though.

 

[firewalker99]

If I had taken your advice Trade 1 would not have happened, but I was sure that today would be a down day and thought that that was the high point.

Trade 2 was early, I could have got in cheaper and with less worry about whether it would come right.

Maybe I will do better tomorrow!

Split

Thanks for contribution and posting charts Split!

In this particular trade I'd say it looks like a decent short, although bit premature. Two bars later there was better confirmation, but more importantly where did you exit and why?

 

[Splitlink]

Thanks for contribution and posting charts Split!

In this particular trade I'd say it looks like a decent short, although bit premature. Two bars later there was better confirmation, but more importantly where did you exit and why?

Thanks for your useful and interesting posts, FW, which are appreciated.

To deal with the two trades of Aug 6th. I was looking for the high of the morning, bearing in mind the previous day's Dow fall, and decided that the high, 4 bars before, could be it. I left 15 points later, when I decided that that high was going to be taken out. I saw no reason in hanging on, because the trade was wrong. If I see no "logical" place to put a stop, I use a predetermined number of points.

Trade two was better. The previous high was 3 bars before. My mental stop gor nicked a couple of times, but it came right before I pulled out. The spike at 1445 made me sell at 6209 for 24 points, way too early., as you can see, but it was correct to profit take, I think. However, it was a mistake not to open short, again, on the 1400 bar-

This second trade backs up your comment to Don in post 150, about the sideways movement.

Perhaps his stops are too close? I had started to increase my distance, by then.

Aug 7th trades. Your question as to what I would have done at the close. I would have had a stop of about 15 points maximum. Linda Rashke's swing trading article suggests that a strong close is a good omen for the next day. I would have, probably, tried her out on that one, although I am not an overnight trader on this latest index exercise, of mine. This morning, it would have been good, wouldn't it?

Split

 

[Splitlink]

Hi Don,

Why have you mixed an exponential average with a simple? You are a great experimenter, now I know why Fins charts aren't sophisticated enough for you and why they are good enough for me

I have lost 13 points, so far, today,by using my wider stop system. I am going to try something new which has hit me in the eye. I can't tell---it's clasified information until I get my first million out of it.

Split

 

[Lightning McQueen]

Hi Don,

Why have you mixed an exponential average with a simple? You are a great experimenter, now I know why Fins charts aren't sophisticated enough for you and why they are good enough for me

I have lost 13 points, so far, today,by using my wider stop system. I am going to try something new which has hit me in the eye. I can't tell---it's clasified information until I get my first million out of it.

Split

Hi eagle eyes, yes, um, oops! dont have a clue why that error was made, its not apparent until a chart is printed, sloppy work again, sorted now, lag is good, works better now... better entries & exits... cheers Split.

With regard to fins charts they're ok I suppose but very, no extremely limited in functionality, which consequently causes extreme pains in the a$$ on the R & D front, I do hope they change them soon.

Ah, that old chestnut of trying something new... tears before bedtime methinks

Lightning

 

[Splitlink]

I gotta go, but I'll post my activities later. Made 16 points net, which I don't deserve after that first trade. I still haven't got that last hours's profit run and it's the best of the day! So much for all day trading!

Ah, yours was a mistake! I thought that you were up to something new

Split

 

[firewalker99]

Linda Rashke's swing trading article suggests that a strong close is a good omen for the next day. I would have, probably, tried her out on that one, although I am not an overnight trader on this latest index exercise, of mine. This morning, it would have been good, wouldn't it?

Split

I know... It would have. But I've seen many different scenarios where it is not the case. Or where after a strong close the next day opens with a serious gap down

The thing is, imho, overnight position holding is risky business unless you have a good idea what the other (overseas) markets are going to do.

Good luck on the new things you are trying out

 

[firewalker99]

Yet again it's the exit that's causing the trouble!

Especially for those FTSE traders out there... there was a nice entry signal earlier on.

However timing the exit was more difficult.
Although you could've racked up some decent points taking that entry, you had to be swift in taking profits because it did reverse sharply again.

Volume did show some clues but none that were clearly decisive imo.
The annotated dots mark exit signals.
Comments/suggestions appreciated.

 

[Thom Hartle]

MFE and MAE Analysis

John Sweeney, former Editor of Stocks & Commodities magazine introduced a concept in a series of article called Maximum Favorable Excursion (MFE) and Maximum Adverse Excursion (MAE). Basically, you review your trade entries and exits and track what the largest open profit (MFE) and largest drawdown (MAE) occurred while you were in the trade.

You will notice that trades tend to fall into three groups: Large MFE with very little MAE and a profitable trade, Some MAE, but then the position moves into profitable territory (good MFE) and a profitable trade, and the last group is a small or no MFE and a large MAE and a loss.

By reviewing these statistics you can come up with one, better targets that reflect your trading style and the current market volatility and two, find better points to abandon a trade because they are a part of the third group that never or rarely recover.

This analysis is a lot of work. By keeping your trading statistics in a spreadsheet, you can develop better strategies using MFE and MAE analysis. Also, this needs to be done once a quarter to keep your style in concert with the market volatility.

 

[black bear]

I know... It would have. But I've seen many different scenarios where it is not the case. Or where after a strong close the next day opens with a serious gap down

The thing is, imho, overnight position holding is risky business unless you have a good idea what the other (overseas) markets are going to do.

Good luck on the new things you are trying out

Thanks for link Fw,

I think Pat asked question scaling in and out of trades that brought me here. My Previous post on Dow thread indicated I enter in 1/3rd or 1/2 at a time for reasons given. Loads of disconnects last month or two.

IMO only my style of trading

All in entry, 1/2 out at 1st target for intra day every time.

Any add is a new trade and should be taken on its merit. if you enter later intra day you are probably entering within the trading range which I don"t think is a very good place to enter IMO, I always end up with a mi-grain on mid-range entries, always

I use 3 time frames to trade month week day or 4hr 1hr & 15 mins.

Good set up would give me a stop close to good ref point in hour time frame ideal targets set in this time frame. The entry time frame 15 mins is to fine tune entry ie: hammer FW pointed out in Splitlinks posts, Soft Stop could be used for twitchy traders me if I get a engulfer the next bar.

The 4 hr timeframe is for judging the trend and giving big picture only. S&R levels etc this time frame can be your long range target for the 2nd half of position, if you choose to let it run that far, Only a few get through but they are the hero"s and account champions and as such rewarded for their efforts. The trader withdraws them from action in the front line and puts them in a safer place (his or her ISA account) some get to go on holiday others just like to go down the pub and tell the tale over and over again how they survived the great pull back from 12 till 2

Your trade is holding position in the HOURS run your profit The instrument of choice (rsi for me) is on the hour time frame and can be used to set profit targets ie: close out 1/2 at overbought. macd would do the same job if in good position exit could come when the hours histogram starts to turn down, whatever suits.

If the 15 mins gives a sell signal 45 mins after entry (ie rsi overbought) it is not a signal to take your cricket bat home just yet you could exit 1/2 if you wanted to because your getting twitchy and hold position till the Hours are wrong.

Most of the time a premature exit is caused by, and I include myself, by the trader getting over excited, trading emotionally because he"s on a winner. and forgetting or watching the entry time frame :-0

The longer time frame signal is the Daddy

Holding in the correct time frame , for me the hours is much harder to do than you think. You may have just had 3 losers and all were in a bit of profit then went bad, its only natural to want to top the old account up first chance you get, but its wrong and poor work practice.

Your method and money management are in place, trades that don"t amount to anything are to be expected.

I will give an example of how I messed up big style. I trade ftse mornings I watched the hours setting up for a perfect long signal only last week, I had experienced a couple of less than perfect weeks but nothing to worry about.

I took the trade on the signal all on in one in the 15 min timeframe, position moved quickly in my favour, I always bracket the first hour of trade and don"t usually trade before it expires. 5 mins to go to the hour and the move was experiencing a touch of exhaustion,

Smart ass me checked out on little pause (15 min) to book me cash and top account up in the 15 min time frame. looking to re-enter I get effectively gapped by 14 pts and judged it to risky to re-enter being now mid-range with no close ref point in the hours. good trade set up down the pan I took my eye off the ball (1Hr time frame) only just given a signal and failed to convert because I perceived I had been gapped, NOT it was the 15 min time frame. I had fine tuned my entry and fine tuned my exit to CLEVER BOY

You have to hold position in line with determined target that should be decided before placing the trade. If you want to churn your account then book 1/2 at 1st target but the rest must run or your playing to break even.

Big Bar, if you are lucky enough to receive what you judge to be one SPIKE in your holding time frame, take full profit and look to re-enter every time, when the boots on the other foot , well Iv found they balance over time so you at least should book full profits because in my experience you experience full loss"s when move against you.

If you only use one time frame for intra day trading , then get at least another one or this posts not for you