Which is more important in Index Futures? Entry or Exit?

Discussion in 'Strategy Development' started by MiniDowTrader, May 1, 2006.

  1. Age old question...which is more important? Entry or Exit? Specifically when trading Index Futures.
    Obviously, trading styles will influence the answers. Scalpers, swing traders, and position traders all work on different time frames and have vastly different targets thus varied opinions on their entries and exits.

    I would consider myself an intraday swing trader that uses a scalper's mentality for entries. I mainly focus on ER and YM for their obvious trending qualities. I place more weight on my entries than my exits. I like to enter as a reversal in the trend "appears", which allows for a tighter stop. I use a 1 points stop on the ER and a 10 point stop on the YM. I'm not a top or bottom picker. I like to see momentum building and hop on for the ride. I'm willing to exit at the obvious levels where I think others will exit/enter and hop back on if the trend continues.

    MiniDowTrader
     
  2. lwlee

    lwlee

    Entry. Once in the money, trail the stop.
     
  3. People answer this Q with regard to their knowledge, skills and expertise.

    You can also see in threads how popular the various aspects of a trade are. Some parts are rarely of interest and most of the time discussions abound for the topics that represent the least K, S, and E.

    There's only one way to make money in markets no matter what method(s) or strategies a person uses. You have to be in the market. That is the only rule.

    With regard to "more" importance, for entry or exit, for me they both happen simultaneously as a consequence of my single decision that the right side of the market has changed.

    I do not deal with determining entries and exits as I monitor, analyze, make decisions and take timely actions.

    For you to approach the markets as I do would be like your considering, while long, making a short entry or conversely, while short, making a long entry.

    Where you to do this for a few minutes you might be able to consider it for a half hour, then an hour, and, then, perhaps, for a day.

    What would happen to your approach if you were to do this? I believe you would move more to a neutral bias and, for sure, all the while you have a trade on, you would get the experience of what it is like to by adding money to your account most all of the time.

    A for instance of being in a long and considering taking on a short would go like this. The short would be a bad idea by your standards right after you got in. Probably because the bid and ask are both changing continually in the same direction and the spread is a minimum. Maybe you would come to a hitch, or stall and find that the DOM was still showing the same imbalance as the prior translation of bid and ask.; later you might work through a dip and still see that the long was more solid than entering a new short trade. If you can get to a high volatility stall of more than 5 ticks, you might consider just taking a short then a long then a short doing the scalping you think about; the trades would be frequent because, maybe by then you could see that being long or short was better each time you made the move.

    One thing is for sure through all of this, you are off the kick of looking at the "exit" or "entry" thing you now focus on.

    Of course, there are the profit making consequences; you are now making money most of the time and in the market as well. Now you are sidelined most of the time because of premature exits and missing entries by being too late. Generally, you run late all the time and are getting confirmations of what could have been instead.

    Maybe someday your job will be to know what side of the market to be on and not to figure out whether enteries or exits are more important.

    Google all the threads that have your topic as the subject. The winner for your question is the wrong answer. Anyone who gives you an answer or entry or exit is giving you the wrong answer.
     
  4. lwlee

    lwlee

    A reply that makes you go hmmmm. It's so thought provoking, it's useless.

    For daytrading, if you enter intraday at a poor point, you lose. Even if you get the directional trend correctly.
     
  5. Based on my own experience, I think that good exits are more difficult to determine than good entries. However, the better the entries are, the less hasty the exits have to be. In my opinion, if you don't have good, or at least reasonable, entries, then you will not likely be a profitable trader. (Back to square one.) And if you do not have good, or at least reasonable, exits, then you will not likely be a good trader. So, I am inclined to respond, "First things first." Even so, a plane needs both wings to fly.
     
  6. Exits are by far the most important. Enter whenever you want. Just follow this rule of thumb and you will be okay: Always exit higher than you buy or lower than you sell and you will do fine.
     
  7. If you don't manage your position properly, you can kiss it all goodbye.
     
  8. excellent question.....the accelerator and the brake.
    Which is more important?
    Once you are thinking in these terms you will see that each is co dependant and it is how you play them that goes to make up the wonderful world of trading.
     
  9. I think Exits are more important.

    You never lose your shirt on a poor entry, however if your entry is bad the odds of making any money on the trade a greatly diminished.

    What I have been doing the past few months with great sucsess is to average both into and out of my positions.

    I used to just say ok:

    enter here
    place stop
    take partials here
    then exit the balance

    Guess what I would get rinsed out of the market all the time. never made any money.

    Now I I look at it like this, I have an idea where support and resistance are going to be. I begin establishing a position with multiple entries, and then I exit on multiple exits.

    My results end up being the difference between my average entries and my average exits.

    In the past I found that no matter how hard I tried to pick a good entry or exit spot to go all in or all out, that I plain old sucked at it.

    Now I due it in stages and I am trading the best in my life.
     
  10. P.S. My prior response on the preceding page assumes that you mean profitable exits rather than merely protective stops. I have found protective stops to be the least difficult to determine to my own satisfaction. And while I view them as important, I think they are a given, and not a relevant topic of discussion in respect of ordinal importance.
     
    #10     May 1, 2006