"greed"

I have struggled with this as well (who hasn't) -I imagine it takes many years to refine this skill - it is always a kick in the pants

 

Yes this has been the reasonable compromise that seemed most sensible on the surface, but after trying it for a time it just left the issue unresolved. When you think about it, any trading indecision can be "ameliorated" by just cutting one's position in half or taking a "middle" approach between two extremes, but it's a very unsatisfying solution if just left at that.

Like alot of other trading issues which have been spelled out time and again in the realm of public literature on the topic but nonetheless plague all of us at one time or another, I think this is one where I'd need to work things out from the ground up before I could really embrace any kind of solution. Who knows, I might end up with the exact same remedy, but I'd still need to "convince" myself in my own way beforehand. Essentially, I need to understand which "hole" in my game this indecision stems from before I can really stick with any changes. I've been mulling over the issue for a while now and I think I'm getting close to realizing its source; I get glimpses of the proper perspective but I'm slow so it takes some time for the words to spell themselves out . . .

 

On some granular level I would agree, but in my trading I've been slowly shifting away from discrete setups towards a more fluid concept of opportunity where yes/no is not an easy point for me to boil down to. The transition to primarily discretionary trading has made me revisit a host of old trading issues I once thought I'd resolved under a different light -- this being one of them.

Getting back to your specific suggestion, what I tend to find in the markets that I trade that makes things so difficult is that A) many pullbacks are not finished until precisely the moment the majority has conceded to a "no" vote on a continuation of the move in question; and B) the pullbacks that reverse to continuation and the pullbacks that just continue to failure are often indistinguishable until too late. It sounds like a no-win situation but I suppose you could expect nothing less from the markets. I guess what I'm saying is that one must often make that yes/no decision far in advance of the actual critical point arising, in order to hold the correct "vantage point" to make the proper choice on whether or not one stays with the position.

 

Sounds like you need to nail down precisely what constitutes an entry for you. Otherwise you're just taking what seem to be (to me, anyway) random entries.

I think I need to clarify what I meant by a yes/no pattern. The word 'pattern' is not a discrete setup; it's a combination of things that tell you that what you expect to happen is not happening.

For this you need to be able to discern what strength in the market is and how it manifests itself. Then you as you see continued strength in your direction you have no worries about staying in the trade. Once you see weakness, you either exit immediately, or you wait to see how much strength is in this new move, expecting it to be weak if you have yet to reach your ultimate target. If you're right, you stay in, otherwise exit.

The higher time period gives you your targets and your entry time frame validates them.

--opm8

 

I agree with opm8. Nevertheless a sign of strength can be very strong or just a little less so. I also agree that there is ultimately a decisive point in price and time that you can't wait for.

So right here money management kicks in. You quantify your signal, whatever it is, you quantify strenght and conviction and then you quantify exposure.
I don't think that's a compromise, you close half your position because your signal is half as good. You have a clear proven sign of strength you keep it on even in retracements.

 

The leap of faith I took in abandoning pure setups required embracing each and every situation as unique, meaning that x+y+z equals 'buy' today but might equal 'sell' tomorrow. On the surface I would concede it would appear random. It was not an easy transition to make, but I've been pretty comfortable with my entries for some time now. The difficulty is an asymmetry between entries and exits for me that I've discussed before on another thread. To boil it down, my entries often involve a number of factors lining up and giving a clear signal to open a position, yet the reverse alignment usually does not manifest itself symmetrically for a clear exit (which is to be expected, but is still taking me some time to get a handle upon).

Yeah I think I know what you mean, sorry if I took it too literally.

Here is where asymmetry comes in; often enough I do not wait for strength to manifest itself before I enter, yet I consistently find myself behind the curve upon exiting . [!] . I am beginning to suspect that lack of "alignment" is just a partial excuse and that positional bias might be the real culprit here . . .

 

I read that other thread. I like it a lot.

I regard nitro very highly unless he starts to get cynical and I liked a lot of your posts.

Can we agree that randomness rather is a quantitative than qualitative term?
That it is only definable relative to a spectator?

It may be an action devoid of all randomness for the Bank of Japan to "teach the market a lesson". They were planning ahead, they see a vulnerability and they mechanically exploit it.
For anybody ignoring their strategies, the actions of the Bank of Japan are pure randomness.

Can you quantify the randomness you see? Can you quantify the fogginess of a windshield?
While you seem to have a definition of a reasonably clear windshield, it haunts you that fogginess is not a switch.

Your reaction to fogginess (exit) shouldn't be a switch either.
And YES, the future path of clarity of that windshield is definitely random.

 

I think this is a very common problem for most of us. When do I exit a winning trade?

The way I tackle this issue is by trying to eliminate greed factor out of all trades that I do. My personal goal is to achieve 2 points in ES per day, no more than 3 trades per day, using 1 point stops. At the moment I am trading 15 lots, if this approach works after 6 months of trading, I will start gradually building up to 50 lot trades. My ultimate goal is to average 50k per week.

IMO this can be a more reliable strategy than trading less lots, though not having any specific targets in mind, but relying on indicators for exits. There are a lot of members of ET who trade 2-5 lots and haven't got a clue where to exit, as their primary subconscious tells them to squeeze as much profit out of 1 trade as possible, though with 2-5 lot trades creats a bit of a twilight zone for the majority.

 

Because I'm working off a predictive model (YM), I pay a lot of attention to (and continue to check) where I am in the market timescalewise.

Also if you are whole daytrading, your exit will have the same charcteristices for re-entry (close and turn around). If exactitude troubles you, scale out and scale in on the turn.

 

illiquid,

Very good articulation of where you are and what is going on with you.

There are about five really classic ways to deal with where you are. I hope to be able to comment soon. When it gets to page 10 or so there may be a couple that still have not been put on the table.

I am definitely going to do a camtasia example on your thread topic at the Tucson IBD MeetUp.