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> It,s not what you pay for something, It,s what you sell it for.
> We don,t always make a profit.
> If you bought a dozen buggy whips looking to profit by re-selling
> them but there is not a market for buggy whips, you loose money.
I'd say that was a bad "entry," buying into a falling market. You
never should have bought the buggy whips in the first place. Given
the bad entry, a good exit is not possible.
I think it's a bit silly to argue over whether entries or exits are
most important. Obviously BOTH are important, since it's the
combination of entry and exit that determines profit. Lousy entries
will spoil perfect exits, and vice versa.
Personally, though, I prefer to focus on entries. Entering at the
beginning of a move gives you much more flexibility -- you can shoot
for larger profit targets, move your stop to breakeven more often and
let things run, etc. More importantly, though, it can greatly reduce
your risk. If you enter right after a major swing bottom/top, you
can set a fairly safe and reasonably small stop beyond the swing.
If you enter farther along in the move, a market-driven stop might be
too far from your entry. A perfect exit won't help you much if your
entry requires such large stops that you can't take the trade, or if
you go bust if you take it.
The trick, of course, is figuring out when that new move has
started...
Gary
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