Need advice on exits

Discussion in 'Index Futures' started by John9999, Jan 26, 2018.

  1. qxr1011


    because exit has nothing to do with profit level

    now you talking

    it has to do with the definition of the trend (along with S/R), do u have it?

    nobody who has the working definition will give it to you

    but when u arrive at it, it will define not only the exit, but the entrance and the management of the trade...
    #41     Feb 23, 2018
    SunTrader and Xela like this.
  2. ScottTTR


    Do yourself a favor and learn how to test/quantify your strategy. A complete strategy includes the entry signal, stop loss, and exit. If you are trading multiple contracts, it will include money management as well. If you have no idea of the long term expectation for each trade, you'll never know when to exit.
    #42     Mar 4, 2018
    tommcginnis and Xela like this.
  3. wrbtrader


    You have other things to be concerned about besides how to designate a profit target.

    Other concerns are trailing stops to protect profits so that you're not in a trade up +20 points and the price action then retraces all the way back to breakeven. Actually, that's very concerning because to sit there and watch a big profit like that retrace and do "nothing" while its doing that retracement is a little strange. Its as if you walked away from the computer after the trade entry as a discretionary trader (no automation).

    The other concern involves re-entry into the same price action after you've reached your profit target especially when the reasons for the profitable trade are still active (valid). Simply, re-entry is like a secondary trade signal. For example, pretend you're Long and had a +20 point take that profit when +20 points are reached. Then it only retraces a few points before moving again higher. You need a secondary trade signal to get you back into another Long position based upon the price action for the initial profitable trade that's still active (valid).

    Yet, instead of re-entries...most traders talk about scaling out at different profit targets along with using profitable trailing stops just in case it retraces on the remaining contracts.

    There's no easy answers but the good thing is that you can backtest (quantitative statistics) and then practice it on simulator prior to any real money trading for possible solutions to determine which is best for your trading style. Simply, what may work for someone else...may not work for you or vice versa because of different trading styles and different personalities.

    Last of all, be very careful of doing rear-view mirror analysis or hindsight analysis...being critical of your own trading when you only look at the best trades that "could" have been a huge profitable trade had you stayed in it a little longer.

    Thus, follow your trading plan and your trade strategy and then don't fall into the trap of rear view mirror analysis especially if its not a chronic (consistent) problem.

    Last edited: Mar 9, 2018
    #43     Mar 9, 2018
  4. In determining an exit for ES intraday trend exits, I consider ES average daily range and adjust my expectations by relative volume and relative volatility of currencies in the European session. There is a correlation between volatility between the currencies and equities futures. In addition, I consider how far the price has moved from support and resistance and how much the support or resistance has been broken. Time elapsed from S/R and S/R breakout can be important as well. I will use an textbook example below that shows some of my considerations in taking a trade to highlight what I’m talking about.

    In this scenario, the stock market has been in a general uptrend with typical volatility and is within 2% of its yearly high. ES average daily range is 1.2%.

    Premarket, I notice ES is up .3% on higher than average volume. In the forex markets, AUDJPY is up .8%, indicating money flows into risk based assets, and has already hit it’s average daily range.

    There are a few medium impact US economic reports on this day. I will wait for these reports before trading ES today. My plan as of now is to look for long entries in ES.

    After the release of the economic reports, ES rapidly swings up and down, taking out recent intraday highs and lows. ES at this point is now up .3%. Based on the previous information, I estimate ES will have a 1.4% range and will be up 1.2% at some point today. I will pencil in ES up 1% on the day by lunchtime. I decide to risk a .2% move against, with an objective of ES plus .7% on the day. Since ES is currently up .3%, my R/R is 2:1. Although there are no clear patterns yet to trade off of, I am confident in this trade. I don’t attempt to go for the up 1% by lunch or the full up 1.2% by the close, because I believe there will be another chance to reenter.

    After ES goes up to plus .5% on the day, I move my stop to breakeven. Soon after, the price corrects to near my stop and stalls. Trading in ES starts to slow and I think about adding on to my position. Unfortunately, there is a very quick stab down that takes out my stop by one tick. I believe we are at a support level and reenter as the price moves upward past recent congestion again. My stop is now a little below the first one. The move accelerates upwards and stalls at high of day resistance. I hold on for a breakout of the high. After a few minutes, This high is taken out and volume jumps. I exit my position about 90 seconds after the high is taken out as volume subsides. I get out with ES up .9% on the day and am looking for another correction. Price wanders in a tight range for a while then shoots up to plus 1.2% on the day. I decide to call it a day, as I feel it is less likely for me to find favorable R/R trend trades in the ES at this point.

    There are lots of variables involved in trying to maximize one’s results. We all interpret things differently and ultimately have to determine what works for ourselves. Note in the example above, it could be said I made at least two mistakes: Having my stop too close and getting out of my trade too soon. A possible third mistake might have been stopping trading when I did.

    I look at this day as acceptably profitable and have no regrets. I reserve regrets for when I second guess myself and don’t follow my trading plan.

    Your dedication to hard work will likely pay off for you. Happy hunting.
  5. tomorton


    Exits are the most interesting problem in trading. As they say, its the exits that make the money, so random exits mean random profit.

    Its my tactic to never leave a trade while its still trending. In fact, I pyramid all the trending positions as soon as they make a profit equal to my initial risk and keep on doing that. This works pretty well with my long-term trades but I suppose not so easy if you plan to be out by the end of the day - are you sure that's a good strategy.
  6. piezoe


    By far the best exit ever was carried off by Bette Davis ascending the staircase in "All About Eve": "Fasten your seatbelts. It's going to be a bumpy night!"