I am working on a strategy and I need some advice on how to exit my positions. Does anybody know some fairly consistent indicators, which help tip them off that in the short term, the current daily trend could be reversing. I have been buying a basket of stocks in the morning, and trying to hold them for as long as I can, but exiting by the end of the day at the latest. I seem to be buying a lot that reverse almost instantly, and the ones I don't buy, seem to go up all day. How can I fine tune this? Any tips or insight would be greatly appreciated.
Perhaps it would provide insight to try the opposite of your present exit strategy. When your strategy says "exit", stay in. When your strategy says "stay in", exit. Since you seem to have the opposite of the Midas Touch, why not see whether money can be made by fading yourself?
There has to be some indicator out there that people use to help time their exits better, or even tip them off that this entry point is no good, do to a reversal coming up.
A good number of traders and gurus are more than willing to openly share their specific entry methods, but few will share how to manage and exit trades. The answers you seek are more than likely here at ET, but you have to keep searching for hints and clues (thatâs why Iâm here).
My time time frame is less then a day. I am buying within the first 20 mins of the day. Right now, I am usually flat by 10:30, but i find that a lot of the time, the stock will continue to go up. So I am trying to find a way to maximize my winners, and cut my losers early, or lock in the profit before they reverse on me.
This may seem simplistic, but I would sugest looking at the daily chart first. When you have determined its general trend, enter only when you see moving in that direction. Trying to pick every reversal is too hard.
Why are you trading this strategy? Have you developed a systems approach to trading it? If so, what are the strongest probabilities for exits? If not, then you will be forever guessing at exit points and its very unlikely that you will ever be consistent in your trading.