|
PureBytes Links
Trading Reference Links
|
It is the exits where most people/traders foul up. Its hard to answer the
question how much is enough.
Most Trend following systems have a big give back in profits. Take PPS in
Coffee last week. It was up $4,000 and gave back 50% of its profits to
only a $2,000 profit per contract. But that is a part of the system. There
will be less than 35% winners but the fact that Trend Following Systems
allow the market to breath help them make the big winners that pay for all
the losses (in the long run) and make some money.
Somebody like Larry Williams who likes to have lots of smaller profitable
trades and maybe a few larger losers takes profits when the market is
really positive for his position.
Exits are a function of Preferences I guess. Wouldn't it be great to use
Trend Following entries and Larry style exits together. Has anyone tested
something like this? That is Buy on strength and then exit on strength.
David Hunt
http://adest.com.au
----------
| From: Clint Chastain <flag@xxxxxxxxxxxxxxx>
| To: Omega-list <omega-list@xxxxxxxxxx>
| Subject: System Exits
| Date: Sunday, September 27, 1998 6:47 AM
|
| 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.
|
| 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? 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
|
|