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>I often read about this, and agree.. it's not the entry, but how you
>exit the trade, that's what matters.
I think both are important. I view it like this:
* Entry rules control risk.
* Exit rules determine profits and losses.
* Entry and exit rules together determine expectancy and opportunity.
* Position sizing determines your net profit or return, as well as
maximum drawdown.
A good entry has nothing to do with how much money you'll make, but
it *can* determine how far away you need to set your stop. Once a
trade is entered, a good exit will make or break you.
>What are some of the good exit strategies besides profit
>targets? No looking for specifics (although most welcome, LOL), but
>would surely appreciate some nuggets of wisdom.
If your profit targets are such that you're leaving too much money on
the table, what happens when you increase your targets?
One successful trader I know and have worked with has all sorts
of rules for exiting trades. Some are mechanical, like a trend
indicator reversal, target profit hit, initial stop hit, trailing
stop hit, first N bars after entry showing no profit, he's out.
And some of his exits are discretionary, based on his intuitive feel
for market flows while looking at 1-tick charts. He may be using
10-minute bars as his primary chart, but during an open position
he keeps his eye on the tick chart. A lot of things can occur
to get him to dump a trade: too many ticks in a narrow range, a
sudden surge in one direction... all sorts of stuff you wouldn't see
looking at the bars.
--
,|___ Alex Matulich -- alex@xxxxxxxxxxxxxx
// +__> Director of Research and Development
// \
// __) Unicorn Research Corporation -- http://unicorn.us.com
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