2,1,1, or 4,2,2, or 8,4,4 or etc.. exit technique

Discussion in 'Risk Management' started by tradingkevin, Jul 12, 2009.

  1. For any trade:

    Always enter with 3 UNITS... UNIT A , B ,C

    UNIT A is a scalp trade which is like hitting for "first base " to lower the initial risk right away on the trade

    UNIT B is the 2 nd base trade to insure that the trade gets a nice Risk to Reward statistic.

    UNIT C is for the HOME RUN and unexpected strong move were the market might not give you a reentry.


    UNIT A: Exit 2 cts @ 1:1 Risk /Reward then move UNIT B and C to half the initial risk

    UNIT B: Exit 1 ct @ 1: 3.5 Risk to Reward then Move UNIT C to Break even

    UNIT C: Exit 1 ct @ previous pivot trail + 5 ticks to pivot

    Best is to enter on pull back which will allow for the UNIT 1 a higher chance of behing hit and therefore making your trade a risk free trade.

    Initial Risk= 10 pts per contract x 4 ctrs = - 40 in total initial risk

    UNIT A: EXIT 2 ct @ 1:1 of initial risk = +10 x 2 cts = + 20

    then move UNIT B and C to half the initial risk

    UNIT B and C initial risk 2x +10 = -20 initial risk is now only -10 . So even if you get stopped out you are still in profit by + 10 regardless what happens

    UNIT B: Exit 1 ct @ 1/ 3.5 Risk to Reward then Move UNIT C to Break even

    now you put a target @ 3.5 you initial risk on UNIT B . so 3.5 x 10 pts of initial risk = 35 pts. So your target now on UNIT B is + 35.

    Once you exited unit B, then only UNIT C is left for the Home Run trade. Trail it once a new pivot has formed. Add + 5 ticks about above the pivot because often you get a double top with 1 or 2 ticks above the previous high or low before the trend resumes.

    FYI. This Trade Management Strategy has a built in a psychological buffer.
    Unit A when exited combined with the lowering of half the risk of UNIT B and C gets you right away in a winning trade and frees our mind up for the next trade by removing some of the fear of a potential loss .

    The UNIT C is there to ease your mind of the " What if I miss a big move syndrom " . And UNIT B is there so that you get a nice 2:1

    UNIT B is to get a nice Risk to Reward Statistic on your side.
  2. whatever.
  3. traderzone. If your only input is whatever you wasted my time reading your whatever !