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I trade the S&P's using a variation of Joe Ross's technique. It requires
trading at least 3 contracts. The first contract is exited during the
initial positive move and "pays the overhead and cost of the trade." The
second contract is exited at the first congestion area or beginning of a
retracement. The third contract is left to ride with a wide stop after
moving the stop to break-even.
While it probably has a lot to do with my trading style, I make most of my
money from the first two contracts.
JFB
Shaven Heads Trading NYC
-----Original Message-----
From: Clint Chastain [mailto:flag@xxxxxxxxxxxxxxx]
Sent: Saturday, September 26, 1998 4:47 PM
To: Omega-list
Subject: System Exits
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
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