|
PureBytes Links
Trading Reference Links
|
In a message dated 9/26/98 1:51:25 PM, flag@xxxxxxxxxxxxxxx writes:
<<I have observed over time that much trading discussion, here and elsewhere,
seems to focus on setups and entry signals. Very little discussion of exits.
Yet it seems to me that when to intentionally leave a trade (vs. being
stopped out) is just as important as when to initiate the trade.
**** I think that exits are more important than entries
Perhaps some of the more learned members of this list would care to comment
on this. For example, are there certain exit methodologies that are more
applicable to markets that tend to rise over time, such as the S&P?
**** If you have a market where you think there will be a long term data bias
in the future you can do a couple of things that come to mind. Buy fearlessly
on big dips and try to hold your positions for big profits.
Are there exit methodologies that work better in markets that don't
necessarily
rise over time, like bonds? Are there exit methodologies that work better in
the short term vs. the intermediate term or long term? And so on.
All comments welcome.
Clint
>>
**** Seems to me that bonds have had a strong upward bias over the last ten
years or more. In any case, you can tailor your exits to fit the style of
trading you want. A short term system would mean that you might want to have
closer stops or even exit while the position is still moving in your favor
instead of trailing a stop and exiting on a pullback. The potential per trade
profit on short term systems needs to be maximized. Should this be by letting
profits run further or by trying to exit on strength? Personally I would be
inclined to take profits rather than holding though ups and downs. Measure
profit targets in multiples of Average True Range and not in dollars so you
take what the market offers. Some profits will be larger than others when
there are changes in volatility. This should also make the exits more robust.
Just scratching the surface here but wanted to contribute something.
Chuck
http://traderclub.com/
|