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John -
I think it really depends on how you trade. I am more of an analyst than
a trader, but I have had at least some moderate success trading. First
of all, unless you are super disciplined I'd always have a stop. This
helps prevent "hoping" the market comes back. You might put it fairly
far away, as a disaster avoidance measure (such as being short stocks
and the Fed issues a surprise rate cut), but having something to protect
you makes sense.
The think that I have found very helpful though is sort of a
combinantion of POP's rules (Phantom of the Pits,
http://www.futuresmag.com/library/phantom/phantom.html ) and what Mark
Douglas talks about. That is that if you enter a trade, you have an
expectation of where the trade is going. Assume you are wrong until the
market proves you right. If the idea is that bonds will rally sharply
and quickly, then if they do not, unless the market tells you they will
grind higher, you should get out. POP says the market must prove you
correct,say within four or so bars from where you put on the trade
relevant to the timeframe you are trading while Mark Douglas basically
suggests that you must always be open to changing info from the market.
IF YOU PUT ON A TRADE AND THE MARKET SAYS U R WRONG, DO NOT WAIT FOR
YOUR STOP TO BE HIT, JUST GET OUT! That has saved me lots of money, much
more than if I would have stayed in these trades for the times that the
market did go my way.
By the way, I find Elliott Wave very useful for this sort of thinking.
This is because each wave has a certain expected characteristic and if
that characteristic does not appear, then there is a good chance I am
wrong.
--
Steven W. Poser, President
Poser Global Market Strategies Inc.
http://www.poserglobal.com
Email: swp@xxxxxxxxxxxxxxx
JMAXBragg@xxxxxxx wrote:
>
> I would like to get some feedback as to when traders should exit a trade gone
> bad in day trading, swing trading and long term investing. Your concepts and
> the reasoning for it would be appreciated.
>
> Thank you,
>
> john
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