How to exit a successful trade!

vvvv · #41 1st November 2008, 10:36 PM

Quote:

Originally Posted by biyasc

actually it depends on the current situation of the market. sometimes exiting 1/3 shows more money, less loss. but sometimes the mentioned method helps me to catch the high price of the day. depends my friend. but i feel comfort with the mentioned method.

yesterday, i bought 50 shares of hdfc on b/o, @1705.xx, placed stop at 1695.xx.

sold 25 shares @1726, sold 13 shares @1721, sold 6 shares @1750, sold 3 shares @1800, sold balance 3 shares @1770.

total profit (25*21)525+(13*16)208+(6*45)270+(3*95)285+(3*65)19 5=1483.

assume that i exited as per the 1/3 rd method, in that case look at the following detail.

bought 50 shares of hdfc on b/o, @1705.xx, placed stop at 1695.xx.

sold 18 shares @1726, sold 16 shares @1721, sold 16 shares @1750.

total profit (18*21)378+(16*16)256+(16*45)720=1354.

the results are near about same. do you have any suggetions to improve this exit method.

i think it depends on ur trading strategy...im goin long trend in an uptrend at the break of the previous pivot high...if trading in RNRL catching a 65 - 75 paisa profit in 1 move is actually doing very well...1st 1/3rd profit taking i actually aim for a 30 - 35 paisa move.next may follow at 60paisa.
if i get a huge mov in the first 1/3 rd itself then i wud exit all my position at my entry if trade reverses.
in scalping i also find the close of a wrb a gud place to capture profits..most of the times ive seen wrb's in rnrl at the breakout of a pivot...
have to replace rnrl with nifty for trading.
i think every stock has its own way of movement .i think sticking to 1 or 2 stocks & nifty fut wud be the best.
as for testing exit strategies its best to develop a system & backtest it which wud require gud programing knowledge,sumthing which i lack.
give ur views also.

AW10 · #42 2nd November 2008, 06:16 AM

Execellent topic for discussion on one of the most difficult part of trading to master. When asked to successful traders about which area they would like to improve further - majority of time thier answer is EXITs. Good to see the ideas and approach adopted by others.

My Exit approach depends on the strategy used for the trade.. for breakout/ bounce based strategy, I have two exits. They are determined by ATR. ATR gives a fairly good idea about the possible size of the next bar. Each instrument/stock has its own ATR value so I am not limited by any fixed Rs. number. I use standard 14 period ATR. My first profit target is 1*ATR where 50% of position is taken out. Rest of the position goes of at second target at 1.5 *ATR.

Once breakout is successful, then I reenter on retracement under my trend following strategy. With that strategy, my 1/3rd position is taken out at 50% of my risk amount. Another 1/3rd at 150% of risk amount and last 1/3rd is left to ride the trend with trailing stops.

This 3 exit strategy satisfy my fear - by taking profit asap, my ego - by booking profit at T2 and making position slightly in profit and my greed by letting my 1/3rd position ride as much as market allows.

Not to mention, stop order is always in place and adjust in size whenever T1/T2 is hit.
My stops at positioned at market structure level and I don't move them to intermediate point where price did not stop. Partial exit at T1, helps in reducing the trade risk without moving the stops to a random number other then mkt pivot level.

Hope it gives people idea to experiment further.

Happy Trading.

biyasc · #43 5th November 2008, 04:54 PM

Quote:

Originally Posted by Cactus

Chataji,

One question please......

Asish (Aca Trader) & u both have written somewhere that for greater profit trade should be run upto 3 pm.
now if u place stop like this how long it will survive.......?

or did u changed ur strategy........?

on that time my goal was to be profitable on yearly/half-yearly/quarterly basis.

on these days, my aim is to be profitable on monthly/weekly/daily basis.

hope you understood.

jeffsmith · #44 8th November 2008, 03:54 PM

Just finished reading the esssay. Good one. It is always to brush up the basics every once a while

ramling · #45 22nd November 2008, 03:21 PM

Dear Sir,

As with my trading experience I SUGGEST TO GO WITH THE TREND with predetermined loss.I have experinced on many days when I exit my position by fixed target price,the price is further going up only.
With Thanks,
Ram.

pokrate · #46 27th November 2008, 12:37 AM

Security never reverses abruptly !
Use this low volatility zone to hold tight, and if possible use ur own profit booking strategy. And if you can analyse, speculate the future course, go ahead with it. This alongwith ATR method discussed earlier in this post by AW10 will work well always.

pokrate · #47 27th November 2008, 12:39 AM

Quote:

Originally Posted by ramling

Dear Sir,

As with my trading experience I SUGGEST TO GO WITH THE TREND with predetermined loss.I have experinced on many days when I exit my position by fixed target price,the price is further going up only.
With Thanks,
Ram.

Your method is good too without any harm, except that one needs to be a master in timing the entry right.

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The Following User Says Thank You to vvvv For This Useful Post:
biyasc (3rd November 2008)

The Following 4 Users Say Thank You to AW10 For This Useful Post:
actuaryinmaking (4th November 2008), biyasc (3rd November 2008), citrus (8th November 2008), pokrate (27th November 2008)