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To clarify my previous email I did not say that Entry is NOT important,
merely that it is LESS important than the Exit. Most beginning traders
spend all their time focusing on the Entry, when they should be spending as
much, preferably more time on the Exit. The EXIT is the ONLY part of the
trading system that determines how much one wins or loses on a trade. The
ENTRY gives only the PROBABILITY of how much one will win or lose! The
ENTRY is PREDICTING the future, the EXIT is living in reality!
Kohath
----- Original Message -----
From: Alexander Levitin <alevitin@xxxxxxxx>
To: kohath <kohath@xxxxxxxxxxxxx>; Ira <ist@xxxxxx>; TheGonch at MediaKat
<Daniel.Goncharoff@xxxxxxxxxxxxxxxxxxxx>
Cc: <realtraders@xxxxxxxxxxxx>
Sent: Wednesday, July 28, 1999 1:44 PM
Subject: Re: Exits? - or the Duck
> At 12:52 PM 7/28/99 -0500, kohath wrote:
> >How much money does one make on an entry to a trade? I would suggest
zero.
> >It is not the entry that makes a trader money, it is the exit.
> >
> Dear Comrades:
>
> An entry and an exit are the start and the end of the trade. It is the two
> sides of the body that does not exist separately. What is the successful
> trade? One that makes money? Well, it is nice, but the goal is not to win
> the battle but to win the war. I want to pay a lot of taxes at the end of
> the year, year after year.
>
> So I need a plan, that includes one entry points and exit points. I have
> complete control over my plan. My plan includes and based upon projection
> of the market behavior. What is the good entry? It is entry executed as
> close to the plan as possible.
>
> After the trade is initiated, I do not have control over the market
> behavior (unless one manipulates thin instrument, is that illegal?). And I
> have a partial control over the exit points. (There are limit moves, there
> are gaps, there are margin call and forced sales). What is the good exit?
> Exit as close as possible to the plan.
>
> Did trade made money? If plan included correct projections and market
> delivered expected profit (even partially) and trade was executed close to
> the plan you have a good profitable trade. If projections were incorrect
> and market did not deliver expected profit but trade was exited according
> to the plan it was a good plan and a good loosing trade (yes, there are
> good loosing trades).
>
> Now if your have a good strategy, then you trading will consist from good
> trades: some profitable, some loosing, and still show profit year after
> year. If your trades are good you are good trader and will make money (to
> pay half in taxes and enjoy the other half).
>
> May you all pay more then a million dollars in taxes this year.
>
> Comrade Alex.
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