Discussion in 'Risk Management' started by ivanbaj, Apr 29, 2009.
Do you spent more time mastering the entries or the exits in your trading?
When you know why, it sticks in your eye!
If you answer entries then your system is trying to predict the future move. I don't believe in predictions.
I have come to the conclusion that one needs to master the exists. Entries are just a ticket that you buy to play the game.
You get paid on your exits.
This might be true, only for you
Let me now say, not for me any day
For when you get in, very easy to win
If you but know, where you must go
Technicals is the easy part of the game.
Then if you're talking purely system development, I'd say 50/50. Both are important.
A good entry allows you to have a mediocre exit and still make a profit. A good exit, even after a bad entry can give you a profit or avoid a loss.
To succeed, you need to be good at both. It's like asking a tennis player what's more important, forehand or backhand.
This might sound fact, but not in the act
For one way you fall, the other stand tall
One should be aware, that all else is bare
If money in ground, opp no good when come round
Markets you see, do like buzy bee
If yellow one smart, he can fill cart
To do so he must, not ever go bust
And when opp is here, he will indeed cheer
So enter you must, where will not go bust
When bet in place, one in the race
Perfect in and see, that for buzy bee
The exit will chime, in its own good time
Think what you may, now and each day
Think you not right, you will get fright
Think what fright do, when you not you
Think not I jest, always think what is best!
If you ask beginners/losers/retailers (usually one and the same) I suspect the majority would focus on entries. Afterall, they are following the typical advice given by trading gurus, trading books and internet forums which is more or less all about entries. Entries are in the past, exits are in the future and full of uncertainty, hope, fear and greed.
Think about it: At what point in a trade do you give yourself money, nip the trade in the bud when it's invalidated by the price action, or realize a big loss?
I believe it's possible to close your eyes and hit market orders for entries, and if you've mastered exits, you will be a profitable trader.
Both are equally important and dependent on one another. The best entries only flash up for a moment. But there are other entries that will continue to come back to you so you can sell or buy them again and again. Today you had example many examples of the once that continually comes back.
The key to entries is knowing when you exit which leads you back to knowing when to enter.
Stop trying to throw one blanket over the market and throw 2 instead.
For the most part I agree. Although based on what I've noticed most retail amateurs probably worry too much about the entry compared to the exit.
Personally I work on both.
Once in a trade, until I have plenty of room for a BE stop, I'm watching the market/tape very closely. Is the action confirming it's likely to work out? If not I'm pretty quick to take whatever is there and sideline for a moment. If, on those somewhat rare occasions, the price moves rapidly in my favor then I'm happy to trail the move with a strategically placed stop.
Since the market is not trending most of the time. Most of the time I'm glad I bailed instead of passively waiting on the initial stop to be taken out for a loss.
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