How do you time your exits? | Metals Mine

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How do you time your exits?

  • #1
  • First Post: Jan 11, 2020 3:05pm Jan 11, 2020 3:05pm
I'm still trading demo but I'm getting pretty good at timing my entries. Whether it's at market or levels I consider significant enough to place a pending order. But I'm still kind of all over when it comes to picking exits.

Should I trail my SL, moving under/over swing highs/lows?

Should I base it on my risk x 1, 2, 3, etc?

Should I pick the a significant level of market structure to aim for like the next support or resistance level?

Maybe there's an indicator that can suggest that a move is over?

I keep reading and hearing in interviews with successful traders that the best thing to do is let your runners run. So how do you manage it?

I'm just wondering, to anybody reading this that is actually trading (no theories that aren't tested please), how do YOU time your exits and how does it work for you? I'm curious the best way. Maybe we can get a lot of responses on this thread and it'll help add some perspective for all of us.

Cheers.
  • #2
  • Jan 12, 2020 4:26pm Jan 12, 2020 4:26pm
Hi,
Good question. There is no uniquely 'best' way, and so much depends on your style of trading and personal psyche. Everything you mention are both sensible and possible and could be used in combination, it really does depend on how you personally see things.

For myself as an example, I'm a short term price action daytrader and utilise a 1R soft initial target. If it gets there I'll exit unless the move still looks very strong in which case I'll try to run for more, exiting then on first stalling or expansion move. Conversely, if it nears 1R then reverses sharply before actually reaching the target, I'll certainly take a breakeven scratch. If the trade never gets going and just reverses against me I'll take a -1R loss on a hard protective stop.

This exit methodology works for me, it suits my style of trading, my aims and my psyche. It may or may not suit anyone else, you just have to structure an exit methodolgy that covers all outcomes and works for you.

In general, the exit method should logically be compatible with the entry method. So, for example, if you use some RSI indicator condition for entry, then some other RSI condition should be used to drive the exit.
  • #3
  • Jan 13, 2020 1:43pm Jan 13, 2020 1:43pm
Quoting Dasilvja
I'm still trading demo but I'm getting pretty good at timing my entries. Whether it's at market or levels I consider significant enough to place a pending order. But I'm still kind of all over when it comes to picking exits. Should I trail my SL, moving under/over swing highs/lows? Should I base it on my risk x 1, 2, 3, etc? Should I pick the a significant level of market structure to aim for like the next support or resistance level? Maybe there's an indicator that can suggest that a move is over? I keep reading and hearing in interviews with successful...
I think, that is not always true but... I found it best to SET parameters before entering the trade because unless one is a terminator (detached, emotionless, feels nothing etc...) things can get extremely distorted and you see "things"... I mean if you check trade tick-by-tick some % (counter) move seems like "it is done" or it if you bet on SHORT, every UP (spike) seems like the tallest skyscraper.. and if you go LONG every "down" (tick/spike) seems like ABYSS and one is tempted to CLOSE to early or wait for too long (chasing the loses)... So I think it is better to have your goals/mind set BEFORE "entering the casino" if you know what I mean.. Meaning, that if I select myself to "get out" at 100% then I do it regardless what RAINBOW appears to form after... And also if it goes SOUTH/counter.. I stick to it no matter what (within risk/exposure) no matter what... I wasted many profits because I didn't wait... That is also true for some NEWS that goes counter before it goes "right"...
Unless of course some NO-BRAINER think happen like ECB publishes something or some DIRECT tweets are "posted" that would imply CORE/fundamentals change... but by that time, SL would already be hit anyway

So the bottom line... BEFORE entering the trade in most cases
Can you afford to take that chance?
  • #4
  • Jan 13, 2020 5:55pm Jan 13, 2020 5:55pm
i always make sure to use the fib extension, normally above the 127 or at that % i take profit.
  • #5
  • Jan 14, 2020 12:46am Jan 14, 2020 12:46am
I'll either scale out or use a trailing-stop.

Scaling out is a good strategy because as the trade goes in your favor your R:R becomes less favorable. If you scale out you're reducing risk. but I don't like how you'll probably leave money on the table at the same time.

I like trailing stops a lot since they offer asymmetric risk. When you have a trailing stop you leave yourself open to positive tail risk and who doesn't want that?
Self-sufficiency is the greatest of all wealth. - Epicurus
  • #6
  • Jan 14, 2020 2:19am Jan 14, 2020 2:19am
Quoting Ef5
I'll either scale out or use a trailing-stop. Scaling out is a good strategy because as the trade goes in your favor your R:R becomes less favorable. If you scale out you're reducing risk. but I don't like how you'll probably leave money on the table at the same time. I like trailing stops a lot since they offer asymmetric risk. When you have a trailing stop you leave yourself open to positive tail risk and who doesn't want that?
Hi,
Trailing a stop in some way, i.e. bringing the stop up as the trade progresses favourably, clearly makes sense as you are both reducing initial risk and improving the current R:R of the trade. It's really a matter of balancing how much room you want/need to allow a trade to potentially go further with how much open profit you are prepared to give up. How you do that is again is largely a function of your trading style and your psyche.

However, scaling out makes less sense to me. If you progressively scale out of a profitable position it means you have the smallest position left at the biggest gain made. Ideally, you'd want that concept the other way round, i.e. pyramid winning positions but that does bring in new issues of its own. Scaling out also means you are in the situation of keeping a losing position at full size but a winning position at reducing size. Again, that doesn't look great, mathematically at least.

The comfort of scaling out is that you are locking in profits as you go along but I think it's mostly a false comfort overall. A trailing stop also locks in profits as you go along and maintains position size. For my trading I've tried all of scaling out winners, scaling out losers, and pyradmiding but felt comfortable with none of them in the end. I just stick to one entry and one exit using a basic trail & soft profit target to keep it nice and simple but, then again, that's just what suits me.
  • #7
  • Edited 4:11am Jan 14, 2020 3:57am | Edited 4:11am
Quoting Oldtraderman
{quote} Hi, Trailing a stop in some way, i.e. bringing the stop up as the trade progresses favourably, clearly makes sense as you are both reducing initial risk and improving the current R:R of the trade. It's really a matter of balancing how much room you want/need to allow a trade to potentially go further with how much open profit you are prepared to give up. How you do that is again is largely a function of your trading style and your psyche. However, scaling out makes less sense to me. If you progressively scale out of a profitable position...

Hey Oldtraderman I sincerely respect your knowledgeable discourse , but of all my profitable days I'm with Ef5 on this. Forex PA is like a bellows.. it breathes in and out in cycles, so I like to hit hard and profit early, decreasing exposure towards the end of the breath. Ideally yes maximising profit at ultimate expulsion of cycle would mean maximum profit, but is so so hard. Picking off profits along the way decreases exposure towards maximum range of motion...
To be more particular... I tend to place 4 trades at once targeting a minimum of 2-3pips for the first 2 trades, then tighten SL to 3 pips for remaining 2 trades, and target >10 pips for last 2 depending on SR /pivots/ and my personal fav 50SMA. Everyone is so so different. Trading styles will always be unique. I trade best when trading discretionary, Forex PA can be challenging reading, and I am always ready to change my mind depending on what it does. I find that a strength rather than a weakness. Place a trade based on an expectation. If that is not met reassess quickly. I like a tight SL, that works for me
Cheers h
  • #8
  • Jan 14, 2020 4:25am Jan 14, 2020 4:25am
Thanks everyone,

These are all great ideas and they help shed a little light on what works. What I was thinking, was scaling out 50% at a multiple of my risk (like 1:1.5 or 1:2) then moving my stop to breakeven. I risk 0.5% per trade so with TP1 at 1:2 , if it's hit and then get's stopped I still close with +0.25%. Worst case scenario is hardly worth mentioning - I just lose the 0.5% right off the hop, obviously. However, best-case scenario is that the remaining position runs straight into a new area of market structure that it hopefully breaks through where I can repeat the process. Again, best case scenario the 2nd trade will hit TP1, lock in another 0.25% gain, then leave the remainder to run along with the remainder from the first trade. Now I'm in a position of greater return without greater risk. Ideally I will have opportunities to do this again and again.

I just found an indicator I like called the Chandelier Stop that I imagine I could use on the initial larger timeframe. I could close all positions when the line on that indicator is crossed.

The way I hope to achieve this is by identifying potential for large moves on very big timeframes like the daily, weekly and monthly. When I feel confident that I found something that's going long, for example, then I can drop down to all the smaller timeframes and start trading with a long bias. Technically, even with a RR of 1:0.5 on a large timeframe, I could potentially have the opportunity to stack several trades on the smaller timeframes. Of course, many would get stopped out, but as long as you give your trade a ton of space to move (trail based on large timeframe swings) then enough should get through and you're still collecting small wins along the way.

To get maximum return on this style of trading I understand that things really have to move in my favour for quite a while (days, weeks, months... years?) but it would obviously be worth it when it did. Imagine how many times the value per pip would increase by the time you cashed in, not to mention the compounding profits. 0.5% for the first trade would be much smaller than 0.5% by trade 5 or 6. And the risk would be marginal all the times that it didn't work out that well. Not much different than your regular trading style. Adjust your risk/trade to suit your own appetite for risk. If you've got a win rate over 50% with targets of 1:2 or greater, then you could double your current risk/trade and implement this method, reap the benefits of stacking runners and not even lower your current ROI. The only catch would be that if your broker doesn't allow hedging then you would have to pass on all the trades moving in the opposite direction.

Thoughts?
  • #9
  • Jan 14, 2020 4:36am Jan 14, 2020 4:36am
Hey all, if you allow me... about RR, for example.

Risk Reward Ratio is irrelevant on the long run.

Why?

Because whatever you do, anyway you put it, it's a 50-50 game all along.
(note: managing positions strictly technically, if we totally ignore the fundamental view)

Demonstration
(Consider each trade for 0.1 Lot size.)

- e.g. if you aim for +20 pips, and fix yo SL at -20pips, it's a RR 1:1. The TP has 50% chances to get hit. The SL has 50% chances to get hit. Just maths.
On the long run (say 1000 trades), if you keep going like this, you may probabily have eventually 500 winners x $20 = $10000, and 500 losers x -$20 = -$10000 (same 50-50 game)
- If you aim for +40 pips, and fix yo SL at -20pips, it's a RR 1:2. The TP has 33% chances to get hit. The SL has 67% chances to get hit. Maths.
On the long run (say 1000 trades), if you keep going like this, you may probabily have eventually ~333 winners x $40 = $13320, and ~666 losers x -$20 = -$13320 (same 50-50 game)
- If you aim for +30 pips, and fix yo SL at -10pips, it's a RR 1:3. The TP has 25% chances to get hit. The SL has 75% chances to get hit. Maths.
On the long run (say 1000 trades), if you keep going like this, you may probabily have eventually 250 winners x $30 = $7500, and 750 losers x -$10 losers = -$7500 (same 50-50 game)
- If you aim for +50 pips, and fix yo SL at -10pips, it's a RR 1:5. The TP has 17% chances to get hit. The SL has 83% chances to get hit. Maths.
On the long run (say 1000 trades), if you keep going like this, you may probabily have eventually 167 winners x $50 = $8350, and 833 losers x -$10 losers = -$8330 (almost the same 50-50 game)

...and so fkn on!

Technically, it's always a tossing the coin game, whatever you do, anyway you put it . And it's by maths, there's no question about it.

Adding, ...please spare me of that "experimented trader's feeling", "...experience" ...just mind that fkn gambler's fallacy !
Also known as the Monte Carlo fallacy or the fallacy of the maturity of chances, is the mistaken belief that:
If something happens more frequently than normal during a given period, it will happen less frequently in the future. (!)

You don't fkn need to know about Bayesian inference or high stuff statistics...
All you need is little common sense.
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  • #10
  • Jan 14, 2020 5:48am Jan 14, 2020 5:48am
Quoting TudorIoan
Hey all, if you allow me... about RR, for example. Risk Reward Ratio is irrelevant on the long run. Why? Because whatever you do, anyway you put it, it's a 50-50 game all along. (note: managing positions strictly technically, if we totally ignore the fundamental view) Demonstration (Consider each trade for 0.1 Lot size.) - e.g. if you aim for +20 pips, and fix yo SL at -20pips, it's a RR 1:1. The TP has 50% chances to get hit. The SL has 50% chances to get hit. Just maths. On the long run (say 1000 trades), if you keep going like this, you may probabily...
You make these calculations based on the idea that price movement is completely random. There are discernable patterns and an immeasurable number of techniques to interpret them and help anticipate the direction of the price. Each has their own relative probabilities. As well as each person implementing them (assuming subjectivity is a variable that matters with their method).

To say RR doesn't matter is absolute madness. It's the foundation of most risk management strategies and risk management is probably the single most important variable determining one's success as a trader long-term.

I'd love to hear the alternative and see the results when implementing it.
  • #11
  • Jan 14, 2020 5:52am Jan 14, 2020 5:52am
Quoting Dasilvja
{quote} You make these calculations based on the idea that price movement is completely random. There are discernable patterns and an immeasurable number of techniques to interpret them and help anticipate the direction of the price. Each has their own relative probabilities. As well as each person implementing them (assuming subjectivity is a variable that matters with their method). To say RR doesn't matter is absolute madness. It's the foundation of most risk management strategies and risk management is probably the...
There are discernable patterns and an immeasurable number of techniques to interpret them and help anticipate the direction of the price.
Really?!? Uhhh...
Prove me here, show me only one that it works on the long run, not for a month or two, you broker shill !
Facts, not words ! Come on !
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  • #12
  • Jan 14, 2020 6:17am Jan 14, 2020 6:17am
Quoting TudorIoan
{quote} There are discernable patterns and an immeasurable number of techniques to interpret them and help anticipate the direction of the price. Really?!? Uhhh... Prove me here, show me only one that it works on the long run, not for a month or two, you broker shill ! Facts, not words ! Come on !
Look up "confluence".

You are pure arrogance. I'm done with you.
  • #13
  • Edited 6:29am Jan 14, 2020 6:19am | Edited 6:29am
Quoting Dasilvja
{quote} Look up "confluence". You are pure arrogance. I'm done with you.
Confluence works even less than 50% on the long run ...if you add positions management you will lose even more than 50% !! ...lose even more than if you flip the coin and pick random direction !!
95% of the retail traders lose money because of your sort of stupidity FACT!
...I mean nobody can be that stupid, deny reality, logic, and no experience... you must be a retail loser or a broker paid influencer
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  • #14
  • Jan 14, 2020 6:43am Jan 14, 2020 6:43am
One more secret before you kick me out, genius !
Search for confluence trading startegy in 1000 cases and apply RR 1:1 ...you'll get less than 50%, something like +39%
Then play anti-confluence strategy in 1000 cases. Surprise !! You'll get like +39% again...
That's really funny, because the most of the noobs reverse the -61% loser startegy and expect to see a +61% result ...never gonna work !

In trading, if you flip a shit you won't get gold, you'll get just another shit !

This is not arrogance, this is many years of trading and minimal common sense
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  • #15
  • Jan 14, 2020 7:14am Jan 14, 2020 7:14am
I get out if price spikes quickly in my direction.. I'll cash out 20 pip spikes all day long. (I know most spikes don't hold)
If price just grinds.. I get out at first Support/resistance level.
The only system that will work is one designed by and for yourself.
  • #16
  • Jan 14, 2020 7:21am Jan 14, 2020 7:21am
Quoting bloodpoodle
I get out if price spikes quickly in my direction.. I'll cash out 20 pip spikes all day long. (I know most spikes don't hold) If price just grinds.. I get out at first Support/resistance level.
Scalper?
  • #17
  • Jan 14, 2020 7:33am Jan 14, 2020 7:33am
yeah.
The only system that will work is one designed by and for yourself.
  • #18
  • Jan 14, 2020 7:37am Jan 14, 2020 7:37am
Quoting hellsbells
{quote} Hey Oldtraderman I sincerely respect your knowledgeable discourse , but of all my profitable days I'm with Ef5 on this. Forex PA is like a bellows.. it breathes in and out in cycles, so I like to hit hard and profit early, decreasing exposure towards the end of the breath. Ideally yes maximising profit at ultimate expulsion of cycle would mean maximum profit, but is so so hard. Picking off profits along the way decreases exposure towards maximum range of motion... To be more particular... I tend to place 4 trades at once targeting a minimum...
Hi hellsbells,
Solid evidence that there is more than one road to trader heaven - unfortunately they are all seem to be a bit bumpy!
What's most important is that you have a considered and structured exit plan that suits you and your trading. Excellent.
  • #19
  • Jan 14, 2020 7:50am Jan 14, 2020 7:50am
What's excellent is the brokers' revenues, ...as long as losers use to stick together like a mystic cult.... even when brokers reports 90% lose money, the same guys keep hanging on trading until the last nickel ...then they see rigged games and conspirations and blame someone else for their failure
How lame is that ???
Retailer's stupidity it's endless ! Viva Las Vegas !
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  • #20
  • Jan 14, 2020 9:07am Jan 14, 2020 9:07am
Quoting Dasilvja
I'm still trading demo...... The only catch would be that if your broker doesn't allow hedging then you would have to pass on all the trades moving in the opposite direction. Thoughts?
//-----

hey dasilvja..... you might hold the record on time in demo..... your patience is admirable.....

having 2 accounts will get past the no hedge rule..... one short trades only.... another long trades only..... ea's and such can easily be coded to recognize the proper account....

as for your question here, my approach depends on timeframe.... tf's below the 240 uses simple multiples of atr..... 240 and above, uses the average length of 240 zigzag.....

this almost assures 2 things..... i will not max the trades full potential and will seldom be left holding a hot potato..... i'm comfortable with that....
//------

in regards to another question of yours, it appears to me a very rough estimate for the average person with average family would be 4 times the average income in the traders country..... of course that single prepper living off grid in montana would much need less.....
//----

Quoting Dasilvja
I'm not overly concerned about making big money. I just want to learn this skill and be able to remain consistently profitable.
when your not concerned about making big money, you usually end up making it.....h
to trade and code, keep both simple... no call to impress....h
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