I've made my view on entries quite clear in the past and stand by them even more now. As far as bashing, if you're gonna post on a thread, that basically says your way or no way, what do expect? Your arrogance precedes and permeates all your posts that I've read. I'll only bash if warranted / and praise if due. You'd better grow thicker skin. You say that you are a profitable trader... then you, of all people, should know entries are synonymous (sometimes more sometimes less) with exits, no matter what time frame. I guess what it comes down to are all these hard set rules that people keep recycling over and over, at any given point, mean absolutely nothing for something as fluid as the market. If you are a successful trader it is the discipline of adhering to what works for YOU. My "failure" journal taught me as much. The whole "exit is more important" theory is for the benefit of newbies so they can focus on not blowing themselves up.
Nonsense. I used to work with half an office full of guys that had over ten years profitable day trading. I myself have over ten years, just not all in a row as I've taken breaks to do other stuff. You probably have just been around rookie traders who usually fail without someone to help them along. Day trading is a mind game for sure, until you get used to it. Once you have the skills, there is no reason why you can't be profitable for as long as you wish to do the job. You may, however, have to switch markets from time to time (people shifting from equities to futures is an example of this). Don Bright states that something like 80% of his traders remain profitable if they are profitable for two years (his exact numbers are in the notes of the chat session he did a few weeks back). I used to work at one of his offices and I believe this to be true. The exception to this are the people who learned to trade during the big bull market in the late 90's. Many of these people never learned to trade at all. They just always went long, with questionable technical skills. They, for the most part, are no longer trading. Jay
you can exit with a lost or with a win and I think it's important to get into the details and try distinguish between the two rather lump them together and decide whether entry or exit is more important. exit with a lose or a stoploss are just like backup contingency plans.. if a bad situation developes..get out.. now..I think all will agree that the best way to avoid a "bad" situation is not to GET INTO the situation in the first place , isn't that what the entry does? Form a systematic trend follower 's perpective ( NOT DAYTRADING..but LONG TERM..trend fader) ...Exiting with a profit is usually just REVERSING,the ENTRY rules either with a shorter time frame (turtle system), or a SAR( MA or MACD system) ... Most exit rules like profit target or time stops are simply not robust enough foruse.. IMHO, those who get fancy with their exits are just curve-fitting with more rules and parameters.. Chuck Lebeau was one of those guys got fancy with his exits (he believe that exits are more important than the entry) and all his system blew up after release.. Now...I just don't see how the exit can be more important than the entry if HALF of the exiting is reversing the entry . it follows from this perspective that the entry is twice more important than the exit because you are entry and exiting with the same rules..
Actuallty most of Chuck's exits are trailing volatility based such as 3*ATR.. or a chandeler ATR volatility trailing stop... His exits have nothing to do with his entry... But you do make a good point about traders simply reversing their entry as an exit... In my experience that does not work well.. volatility based trailing stops happen to work well when testing for high gains and small losses.. with a hit rate of under %40... which is charateristic of a trend following system... Let me give you a real life example... I traded a trend following system that waited for a correction in a strong market.. then entered on the first sign of resumption of the trend... My intitial stop loss was a few ticks under the swing low.. and my trailing stop was a 20day moving average. That was pretty much it... If profits were getting parabolic I simply switched my exit to a 10 day Moving average. With this system I was right about %33. Avg. win to loss was 1 to 3.5 ... basically a 50 cent expectency. My entry had nothing to do with my exit.. The reason for the success of my system.. was because I had a few huge winners and aboslutely no big losers.. which I would attribute to my exiting. AFter trading it for over a year... I had something like %80 of my profits come from %15 of my trades.. which is about normal for a trend following system... Another fact which is obvious is that my winners were held much longer than my losers... which shows that time is on your side and it should be maximized as much as possible when holding a winner... --MIKE --MIKE
Thank you for making those fine points. I value entry/exit below waiting (sidelined/ holding for similar reasons. There is no value at all to a loosing exit nor the entry that gave you this specific screwup. Entry and exit are just moments in time. I feel that I end waiting at the time my order goes in for the market to come and then take me into a trade. My exits (or reverses) are at market. I just decide when and the market does the rest. So for me the important thing (and period) is the hold and it is based primarily on market flaws. When flaws occur, I am directed to fewr options to continue to make profits. Finally, at some point the money velocity of the trade dictates that I be elsewhere. therefore, I go. I continually C&R according to the pace of the market. As I see no more new potentail stops appearing in me stop log; then I know there is a flaw appearing in the money velocity I am maintaining.
today, i had on some of the most "perfect" shorts ever!! I mean you can't get more right than these shorts. But I had the MISFORTUNE of "exiting" too soon! I came back with another "perfect" entry, but then exit too soon. I mean the profits are still OK. But they could have been SIGNIFICANTLY larger. So, I guess I need to work/focus more on my exit(s) strategy now. But both of them are important. Bad entries would have costed me dearly. I know. I've been chopped to death on bad entries....
A classic statement. Yesterday was classic as well. Sustained trends exhibit channel traverses that repeat in each direction just like clock work. You broke up one trend into pieces and saw that each trade was going like the clockwork of the traverse within the trend channel. Your reflections state that you make money with these short excursions in trends and you get beat up in lateral channels because the same price/volume traverses in different types of channels aren't profitable. One time you are with the trend and another you get whipsawed. Holding through the trend and getting on the "other side" of a whip saw, require the same focus and effort it turns out. People who get whipsawed actually teach themselves to not be able to hold through an entire trend. So your post is a classic one for people in the space you are in. Almost anyone can double their money velocity over time by correcting these two problems that stem from the same source of difficulty. The answer is simple and takes about three passes in comprehension. It is one of those pieces of knowledge that is almost invariable misunderstood the first several times it is presented to a person. Since it is not processed mentally in an easy manner, usually the misunderstanding prevails and an opportunity to grow is passed by. If you look at why you act prematurely, you can see what it is that you misunderstand. The best way to not misunderstand is to ask questions. When you have a question, then you can process the answer. Take a look and see what is there to consider. The leading indicator you are missing, will be where you find the answers if you can examine where you are.
jack: thanks for some suggestions. I'll think about it. I think it's getting there... Not sure if I understand everything you wrote old deep wise one.. trend: yes, exits! exits! doh! Need to refine my exits. But good entries have saved me many times too. But without a great exit(S) , it will be very difficult to move up into the higher realm of great profits... btw, have you guys noticed that sometimes your stop get hit then the market reversed at that exact point! I've been trying to reduce and not trade thru the noise. It's just eery that I set those points on the charts. haha. They are out to get you! ROFL!
To me an exit is almost brain dead easy. I trade hundreds of times a day, and if I contempalted the exit as much as you did, the profit would be GONE. I agree with the poster above that it greatly depends on the style of trading you do. nitro