exit strategies - what's the best?

[michaelm]

i'm posing this question to entire group...what have you found to be the most consistent/best exit strategy?

i'm mainly interested in getting in/out intraday, with no overnights. i lean toward covering ~50% of position after gaining a couple points and letting the rest ride with BE stp to start. perhaps some pyramiding strategies as well.

look forward to hearing from you all.

[JT47319]

In Mark Douglas's Trading In the Zone, he suggests something along the lines of grabbing a point with one contract, another at a price target, and letting the last one ride. Or B/E + Commission stop on the last two contracts, which ever comes first.

He suggests that the risk reduction & psychological benefits of getting that first point is very important, which I agree with. Just ringing the cash register and putting a little in my pocket makes me breath just a little easier.

Other strategies would be a reflecting pyramid: 4-2-1 in, 1-2-4 out.

[Momentum]

Exits are more important than entries

Exits are more important than entries - managing your position is critical to profitability. Getting out too early has always been my greatest sin. I devised a mechanical method that trails prices - far enough away to keep me in - and exit on those with some re-entry rules. I agree with a 2 exit method - take the first profit at a price equal to your stop loss and let the rest run on a definable exit strategy.

A great trader once said to me that he can mostly put on any position - short or long - and manage it to a profit most of the time.

[michaelm]

yes, i agree. exits are crucial to successful trading. good stuff so far...thanks.
a floor broker friend's quote is 'successful trading is 10% picking market direction and 90% money management'.

[theplumber]

Re: Exits are more important than entries

I disagree with the lack of importance to entries, even if I'm right about direction (which I don't know until after the fact) you will never pick the exact bottom or top, so how much pain you can take makes entry much more important. Mark Douglas hits it on the head though with scaling out, I also scale into a direction postion so if I'm wrong it only costs me 1-3 contracts at the most, but if I'm right I go with a total of 10 and scale out on the fast moves.

Originally posted by Momentum
Exits are more important than entries - managing your position is critical to profitability. Getting out too early has always been my greatest sin. I devised a mechanical method that trails prices - far enough away to keep me in - and exit on those with some re-entry rules. I agree with a 2 exit method - take the first profit at a price equal to your stop loss and let the rest run on a definable exit strategy.

A great trader once said to me that he can mostly put on any position - short or long - and manage it to a profit most of the time.

[michaelm]

so, plumber, are your entry and exit methods a constant or variable (depending on current market conditions)? if constant, what scaling methods have you found to be successful? If varied, what methods do you then incorporate?

I also scale into a direction postion so if I'm wrong it only costs me 1-3 contracts at the most, but if I'm right I go with a total of 10 and scale out on the fast moves.

[theplumber]

My trade system is based on entering at certain times when a certain price has been met. The picture shows a service I subscribe to and all charts were sent for the week on Monday morning. I have times to trade from Al Larson and my square of 9 to match with price. For example, today I looked at the model and saw a possiblity for a move down to So9 support of 980, ES trades inefficient so I scaled in 1 contract at a time from 980 to 978. If I was wrong after a 3 contract position I would stop out at 974 and reverse short from long. The tide time Al gave was 9:55 market time for a reversal (sent the night before) and when the plan came together I added on the way up to a full position with average 977.5. I freaked when it stalled and exited all @982. I redid the trade twice, scaling in and out with 3 @ a time on the way out, trying to get at least 1 point per 3 contracts. I've lost alot of money in the past so I'm very paranoid (I think every trade is a looser from the start) and exit when ANY sign of trouble comes. This may sound strange to some who try to capture 5 points a trade but I see time in the market as added risk, and make 4 times more money than my job I once had.

Originally posted by michaelm
so, plumber, are your entry and exit methods a constant or variable (depending on current market conditions)? if constant, what scaling methods have you found to be successful? If varied, what methods do you then incorporate?

[theplumber]

I don't think I answered the question enough. I started trading as a tape reader so I watch the time and sales and market depth very close when trying to work a trade. I look for if size is being absorbed or replenished on either side, and if the 1-5 lot daytraders are panicing with the time and sales. If big size panics, a squeeze (long or short) is happening and I will enter at any price, good for at least a point. Today I saw that size was above the market (a favorite local trick) this morning to make it look heavy, but the bid was replenished when taken, then the size came in on the bid and the ask size disappeared. That's when I started scaling more than my first 3 contracts, this tells more than any chart. Keep in mind that many locals are overlooking the pits with terminals direct to the CME, they are playing the games and work the flow. Hope this helps

Originally posted by michaelm
so, plumber, are your entry and exit methods a constant or variable (depending on current market conditions)? if constant, what scaling methods have you found to be successful? If varied, what methods do you then incorporate?

[theplumber]

Astro model

If anyone would like to see the power of astrophysics at work using the AIR program go to this website http://www.shadesouth.com/intra-day/...Forecasts.html they have a free trial, but make sure you check it every day for an update. Here's todays trading.Focus on the pattern not the times, this is posted 2.5 hours into trading today so everyone knows. Used with the So9( which has resistence for S&P @ 1008) and Larsons trade times, it can make you money.

[theplumber]

This is some Gann Square of nine trading for today 6/6/2003

[fabrizio]

Plumber

What program plots you the gann square of 9?

I dd subsrcribed for the Air Software.

Did you enjoied the FIBO Calculator?



Go ahed like this

[fabrizio]

As usual I perfectly agree with Plumber.

I do "Rithm" my entry and exit basically with A combination of TOM DEMARK studies and indicators: With COMBO /SEQURNTIAL and TD ROC, TD ROC1 and TD ALI I prefer go heavy in size many times in the same direction during a declared trend going out scaling 4/5 contracts from 3 points to 6 to 10 or 10 with a fast trailing automated. (I use Ninja trader from Raymond Deux with now at release 5 is AMAZING, isn't it Plumber?)

Break out on TDM TD LINES AND TD REBO. Or TD Relative retracements

REversal with TD PIVOT and <TD Point Reversal at High or at low.......

Or In congestion play on the minute with The TD REI, with even higher 5/6 sizes but even shorter time exit. (max 8/9 minutes)

I like longer position with large stops on the BUND or on Currency

Originally posted by theplumber
I've lost alot of money in the past so I'm very paranoid (I think every trade is a looser from the start) and exit when ANY sign of trouble comes. This may sound strange to some who try to capture 5 points a trade but I see time in the market as added risk, .

[theplumber]

I have Mathematica and I've programmed into it a notebook with all impotant dates and high/lows to look for Fib, square and square roots, but the FIBO calculator is cool. The So9 I have is from here


[QUOTE]Originally posted by fabrizio
[B]Plumber

What program plots you the gann square of 9?

I dd subsrcribed for the Air Software.

Did you enjoied the FIBO Calculator?]

http://www.globalviewtech.com/home.php?m=0

[fabrizio]

Re: Astro model

[QUOTE]Originally posted by theplumber
[B]If anyone would like to see the power of astrophysics at work using the AIR program go to this website [URL=http://www.shadesouth.com/intra-

I'v been watching the site forecast since your post, they look interesting.

What kind of tool you said , are they using for forecasting?

[theplumber]

Re: Re: Astro model

Did you get my email Fabrizio?

[QUOTE]Originally posted by fabrizio
[B]

Originally posted by theplumber
[B]If anyone would like to see the power of astrophysics at work using the AIR program go to this website [URL=http://www.shadesouth.com/intra-

I'v been watching the site forecast since your post, they look interesting.

What kind of tool you said , are they using for forecasting? [/B]