What is your EXIT strategy

[Rkji]

hi all

well, due to some PC issues i am not trading these days but game for discussions as i have to access net from work.

it is very surprising to know that i could not find a single thread on forex factory, TJ, forex-tsd & blah..blah which focuses strictly on EXITS by any breed of traders ! I mean all traders consecutively posting EXIT strategies.

EXITS are very very important, more than entries, and all i did & see other fellow traders do is SEARCH for magic systems, indicators & ENTRIES.
yes, any system dealt with consistency will allow profit but ..................

what have you done to smoothen your EXITS ?

many times we just want to ride the trend till it lasts but it has proven dangerous as well, so fix TP comes to mind, but even that does not work !!!

please don't come up with a foolish remark, nothing works for ever in forex...
we might know it already !!!!! rather come up with an answer.
it is very easy to jump on keyboard to mark your expert answers but equally difficult to remain humble & share an insight.

when we start forming a trading system, all we look at is how well the indy or strategy is mocking price... what the hell... you can always see good entries & spot pips running but if you don't know when to take money on table...boom & you see red everywhere !

truth is all indicators have to follow price data so by the time you act upon it, pips are already lost or even if you had good entry by tight running ma' s crossover...you know what happens at EXIT if no fixed TP kept !
i have cut down on indicators where as i had 4-5 previously.

price action lovers, i admire you a lot & i wish i could trade off patterns some day by just watching price but that's not me.
i hold great respect for desifxtrader, tavnaz & preet in this regard.

desifxtrader was the one who drew my attention back to trendlines & made some of my basics stronger.

i like tavnaz' s approach towards price action.

i respect preet a lot because his was the first system with which i had major success but somewhere i felt system in live was not helpful though it could be ignorance on my part. I heard different results for different people but i admire & respect the guy for what i have learnt from him & recommend reading his posts in forex factory.

hey...coming back to EXITS

i came across an indicator (not really an indy though)
by the name of grid builder, which was introduced by preet in forex factory. thanks preet :thumb:

it is very helpful as you are able to build a customised grid quickly & set distance of 50 or 100 pips or so on. till now i had never realised that grid was very important as the default grid seems awful at first.
but traders, you are instantly able to determine price action if you keep looking at price around grid. it has helped me to some extent in EXITS.

well, i also realised that timeframe plays a very crucial role in fixing amount of pips you want to secure. I always heard that timeframe doesn't matters & you can earn as many pips as you can in any timeframe till trend lasts but hey...you don't know when it will last..do you ?

so for example you are trading a 15 min tf...best TP so far has been 7-9 pips...that's it ! i have tried & hit home runs as well but 7-9 pips seems to be running most of the times if you had a good entry.

i believe EXITS are a problem because price always wants to RANGE...because of which i am working on an indy which tells if price is ranging but hey that is the only second indicator i have on charts


various EXITS used by professional traders i have come up so far :-

* fib
* pivot

(* exit strategy during 30 Min TF

EUR/JPY

1) I target 20 pips and close half positions .At the same time move my S/L to entry point for the other half position.

2) Then ,trail my S/L by 10 pips for each 25 pips move in my direction. However considering the huge volatality a S/L of 10-15 pips can be eaten away in a minute.

EUR/USD

1) Closing half at 15 pips .At the same time move my S/L to entry point for the other half.

2) Then ,trail my S/L by 10 pips for each 20 pips move in my direction.

please note that a trader has mentioned EXIT above based on his experience & ain't mine.)

* bull bear or vice versa candle combo in BB
* price crossing single ma
* reversal of a smoothed moving average or ma' s like xpma, nonlagma, nonlagAMA etc...
* alligator exit
* trendline
* linear or polynomical regression
* fixed TP or SL trailing

i would request all traders to throw in their current or past EXIT strategies which worked for them.

strictly for posting EXITS only... not by numbers but explanation as to why you exit on your profitable or loosing trades .


regards
rishi

 

[Raghavacc]

hi all


EUR/JPY

1) I target 20 pips and close half positions .At the same time move my S/L to entry point for the other half position.

2) Then ,trail my S/L by 10 pips for each 25 pips move in my direction. However considering the huge volatality a S/L of 10-15 pips can be eaten away in a minute.

EUR/USD

1) Closing half at 15 pips .At the same time move my S/L to entry point for the other half.

2) Then ,trail my S/L by 10 pips for each 20 pips move in my direction.

please note that a trader has mentioned EXIT above based on his experience & ain't mine.)


i would request all traders to throw in their current or past EXIT strategies which worked for them.

strictly for posting EXITS only... not by numbers but explanation as to why you exit on your profitable or loosing trades .

regards
rishi

Hello Rishi,

Of course above are my experience and I also searched almost everywhere to find a reliable exit strategy.There is none. Its purely individualistic.

I personally follow this strategy now a days.

1. I find out whether a pair is trending. For this I follow an indicator called G7 courstey : Forex Factory.Hope I am not violating any forum rules!!!.

2. If its not trending I target 8-10 pips and close full position.

3. If its trending I have a feel for the length of a particualr wave .Its again comes from observation, experience and backtesting.Say like a wave in a particualr pair lasts for 80 pips. Then the countertrend rally for 40-50 pips. Like this.Thats the reason I do trade few pairs as it gives needed comfort level and you know the tendency of that pair..Then you have put a good question."when do u say a rally has ended"? .Well here comes price action and the pattern. Any big rally 9 out of 10 times ends with a pattern .It may be a shooting star,hammer, bullish engulf ,bearish engulf,hanging man,doji's one after another etc and stoch in overbought or oversold and so on. Thats where one has to be solid and here I close half and keep rest for the next wave. 38.2 and 61.8 are my Fib retracement levels as most of the pairs respond to these levels positively. I have the options of adding to my position at these levels. Well.If it retraces beyond 61.8 I close my other half.

Do note that I am just a baby in this forex world.I just shared what a thought. I receive all positive and negative comments full heartedly.

Regards
Raghav

 

[Raghavacc]

hi all

well, due to some PC issues i am not trading these days but game for discussions as i have to access net from work.

it is very surprising to know that i could not find a single thread on forex factory, TJ, forex-tsd & blah..blah which focuses strictly on EXITS by any breed of traders ! I mean all traders consecutively posting EXIT strategies.

EXITS are very very important, more than entries, and all i did & see other fellow traders do is SEARCH for magic systems, indicators & ENTRIES.
yes, any system dealt with consistency will allow profit but ..................

what have you done to smoothen your EXITS ?

many times we just want to ride the trend till it lasts but it has proven dangerous as well, so fix TP comes to mind, but even that does not work !!!

please don't come up with a foolish remark, nothing works for ever in forex...
we might know it already !!!!! rather come up with an answer.
it is very easy to jump on keyboard to mark your expert answers but equally difficult to remain humble & share an insight.

when we start forming a trading system, all we look at is how well the indy or strategy is mocking price... what the hell... you can always see good entries & spot pips running but if you don't know when to take money on table...boom & you see red everywhere !

truth is all indicators have to follow price data so by the time you act upon it, pips are already lost or even if you had good entry by tight running ma' s crossover...you know what happens at EXIT if no fixed TP kept !
i have cut down on indicators where as i had 4-5 previously.

price action lovers, i admire you a lot & i wish i could trade off patterns some day by just watching price but that's not me.
i hold great respect for desifxtrader, tavnaz & preet in this regard.

desifxtrader was the one who drew my attention back to trendlines & made some of my basics stronger.

i like tavnaz' s approach towards price action.

i respect preet a lot because his was the first system with which i had major success but somewhere i felt system in live was not helpful though it could be ignorance on my part. I heard different results for different people but i admire & respect the guy for what i have learnt from him & recommend reading his posts in forex factory.

hey...coming back to EXITS

i came across an indicator (not really an indy though)
by the name of grid builder, which was introduced by preet in forex factory. thanks preet :thumb:

it is very helpful as you are able to build a customised grid quickly & set distance of 50 or 100 pips or so on. till now i had never realised that grid was very important as the default grid seems awful at first.
but traders, you are instantly able to determine price action if you keep looking at price around grid. it has helped me to some extent in EXITS.

well, i also realised that timeframe plays a very crucial role in fixing amount of pips you want to secure. I always heard that timeframe doesn't matters & you can earn as many pips as you can in any timeframe till trend lasts but hey...you don't know when it will last..do you ?

so for example you are trading a 15 min tf...best TP so far has been 7-9 pips...that's it ! i have tried & hit home runs as well but 7-9 pips seems to be running most of the times if you had a good entry.

i believe EXITS are a problem because price always wants to RANGE...because of which i am working on an indy which tells if price is ranging but hey that is the only second indicator i have on charts


various EXITS used by professional traders i have come up so far :-

* fib
* pivot

(* exit strategy during 30 Min TF

EUR/JPY

1) I target 20 pips and close half positions .At the same time move my S/L to entry point for the other half position.

2) Then ,trail my S/L by 10 pips for each 25 pips move in my direction. However considering the huge volatality a S/L of 10-15 pips can be eaten away in a minute.

EUR/USD

1) Closing half at 15 pips .At the same time move my S/L to entry point for the other half.

2) Then ,trail my S/L by 10 pips for each 20 pips move in my direction.

please note that a trader has mentioned EXIT above based on his experience & ain't mine.)

* bull bear or vice versa candle combo in BB
* price crossing single ma
* reversal of a smoothed moving average or ma' s like xpma, nonlagma, nonlagAMA etc...
* alligator exit
* trendline
* linear or polynomical regression
* fixed TP or SL trailing

i would request all traders to throw in their current or past EXIT strategies which worked for them.

strictly for posting EXITS only... not by numbers but explanation as to why you exit on your profitable or loosing trades .


regards
rishi

Hello Rishi,

Of course above are my experience and I also searched almost everywhere to find a reliable exit strategy.There is none. Its purely individualistic.

I personally follow this strategy now a days.

1. I find out whether a pair is trending. For this I follow an indicator called G7 courstey : Forex Factory.Hope I am not violating any forum rules!!!.

2. If its not trending I target 8-10 pips and close full position.

3. If its trending I have a feel for the length of a particualr wave .Its again comes from observation, experience and backtesting.Say like a wave in a particualr pair lasts for 80 pips. Then the countertrend rally for 40-50 pips. Like this.Thats the reason I do trade few pairs as it gives needed comfort level and you know the tendency of that pair..Then you have put a good question."when do u say a rally has ended"? .Well here comes price action and the pattern. Any big rally 9 out of 10 times ends with a pattern .It may be a shooting star,hammer, bullish engulf ,bearish engulf,hanging man,doji's one after another etc and stoch in overbought or oversold and so on. Thats where one has to be solid and here I close half and keep rest for the next wave. 38.2 and 61.8 are my Fib retracement levels as most of the pairs respond to these levels positively. I have the options of adding to my position at these levels. Well.If it retraces beyond 61.8 I close my other half.

Do note that I am just a baby in this forex world.I just shared what a thought. I receive all positive and negative comments full heartedly.

Regards
Raghav

Wel,l Here let me share my little knowledge.

I keep it simple.If you see the GBP/USD 1hour chart there are 2 bearish engulfing bars( marked in red arrows). It points towards south .So I am short taking opportunity in 15 Min chart ( entry through short timeframe chart). I know the pattern has happenend at the top. I may be right.I may be wrong. Now the price to reverse has to happen through an :Occurance". I will wait for that occurance and close half. then the other half will be carried till max of 61.8% retracement.Beyond that close the position.Other wise ride the trend.

Thats how I exit my positions.

Regards
Raghav

 

[Tavnaz]

Hi Mr Rishi,
Raghav i like your charts,i see you are not using lazyboy, i guess.
I think you maybe becoming a PA fan.hahaha
And Raghav man,you don't need trend finders to test the presence of trade a simple trendline will do.


Anyways,if anyone wants to hear that, very old chatter(which i also advocated before) about my exits,i am willing to post here.
Just need heads up from you two.
Waiting for for your replies,in the meantime, i am just polishing my guns(charts) for presentation.:lol:
Regards
Taz

 

[Raghavacc]

Hi Mr Rishi,
Raghav i like your charts,i see you are not using lazyboy, i guess.
I think you maybe becoming a PA fan.hahaha
And Raghav man,you don't need trend finders to test the presence of trade a simple trendline will do.


Anyways,if anyone wants to hear that, very old chatter(which i also advocated before) about my exits,i am willing to post here.
Just need heads up from you two.
Waiting for for your replies,in the meantime, i am just polishing my guns(charts) for presentation.:lol:
Regards
Taz

Hey Taz,

I really like the way you follow PA as well as your charts.At the same time I am a great admirer of Lazyboy too as it lays foundation for the beginner and builds confidence.

Eagerly looking to hear exit strategy from you .Its a good initiative from Rishi as rightly said by him there are hardly any quality material on "EXIT" and "STOPLOSS".Hope to see lot of contributions from other members as well.

I will jump to your thread for discussing other PA subjects very soon as I need to learn a lot from you.

Regards
Raghav

 

[Tavnaz]

Market Microstructures, S/R and PA and TA, Exit Strategy.

Market Microstructure:

Any Market runs on two basic forces,The Demand and the supply.
If there is more demand at a particular price then the supply,
then the Demand will eat up the overhead supply inside the market at that particular point.
And the Prices will move up as the market seeing eagerness amongst the buyers push the prices up and demand more,value
for the supply.
So that is why rising prices are just caused because of increasing buying interest within the masses.
No buying interest at a particular price in the market,then the price fall.

Consider if you purchase 1000 units of a currency at 1.2345 and the stop point for it is placed at 5 points below.
And at that price there is more supply then the demand then supply will overwhelm demand and will try to eat up demand at that price and fall to lowr bids.

Say the Demand at the 1.2345 is 10000 units and supply is 30000 units then prices fall to lower bids to eat up the demand,
and therefore fall.
Say 1.2345 demand of 10000 units.
say 1.2350 demand of 5000 unit.
say 1.2330 demand is 100000 units.
Now falling price cascade will eat up the demand until a point is reached where there is more demand then supply.
And in this case the demand is at 1.2330,so prices fall till 1.2330 and you are exited at a loss.

Any Crossover or any other thing the participant saw,on the basis of which he entered will fail completly because of these primitive forces.

Here Comes PA when the TA experts using sexy candlestick patterns find out hot spots of demand and supply in the Market.

PA and TA:

The Price Action and TA only help in findling the underlying Market sentiment.
And thereby help in finding what market is saying.
Consider a double Top formation,the first top is just another bull move in an uptrend but.
TA expert by looking into the second bottom can see a failed attempt to push prices up,and thereby deducing that people are no longer interested in buying but in selling.

Exit strategy based on Above:
As said earlier PA tells us these hot spots of Market forces,if you have 10000 units of any currency pair at cost of 1.2345 running in the market,
and you are targeting 1.2435,so if there is no demand cascade in between the prices won't move that far.
Say price cascade was only till 1.2400 after which there were Sell orders placed all over 1.2400 Pivot Zone.
Now you would say i won't exit,you would loose because there is not enough demand there to push price up.

At 1.2400 supply will eat the demand and the price will fall and take you out for a loss.
So there is only one thing to exits,find out these hotspots,and react accordingly.

So some People use PA some use Ichimoku clouds,some use fibonacci.

But those who use Crossover systems are only using Market Momentum and Demand Supply Cascades at the basic levels.

So above is my theory on Exits,and is Universal theory,Use it and win the markets.
See you later Guys,
If any questions drop me a line, i will answer.
Regards
Taz

 

[vicky_ag]

Are entries that easy? I dint know that.

Frankly Rishi, if you think about it issue lies with entries rather than exits. Exits are easy - Like your profit? Satisified ? Is it enough? Yes! Yes! Yes! then exit.

 

[Rkji]

Are entries that easy? I dint know that.

Frankly Rishi, if you think about it issue lies with entries rather than exits. Exits are easy - Like your profit? Satisified ? Is it enough? Yes! Yes! Yes! then exit.

vicky

let me assure you that ENTRIES are a piece of cake & you can enter on basis of trendline break, ma crossovers or new trend beginning in ma' s like nonlagma & xpma. you WILL get awesome entries. try putting a nonlagma (55 or 100) on a chart & you might start loving TA again

i have talked with many professional traders during this time & all of them relate to EXITS & the RANGING times.

EXITS mark whether you had a profit or loss & it' s upon the risk appetite of a trader how long to hold or keep a fixed TP, SL...anyways...i took long to understand importance of EXITS & like regular people was running after systems, indicators which showed good entries since they mocked price well but where will price or your broker can drop you...hmmm. equally important is stay away from ranging market as price loves to range where you loose all your profits.

i have never relied on volume as i feel it isn't truly portrayed !

" Exits are easy - Like your profit? Satisified ? Is it enough? Yes! Yes! Yes! then exit. "

well, problem comes when you want to ride the trend as long as possible when you had a strong entry & just relying on a fixed TP, SL may not be fruitful for always. although i agree taking fixed pips / day are excellant which i intend to follow with discipline but there gotta be couple of home runners to sustain unseen losses. the market doesn't care if you wanted to have a 1:1 or 1:5 risk reward so if you are keeping 15 pips : 15 pips...it might just move 8 pips in your favour & hits your SL !!! And you wish you had something to inform TAKE MONEY ON THE TABLE.....NOW !!!

you got to decide how much is enough in a strong trend & how less you can squeeze from a range, if taken trade in ranging !


regards
rishi

 

[Tavnaz]

well, problem comes when you want to ride the trend as long as possible when you had a strong entry & just relying on a fixed TP, SL may not be fruitful for always. although i agree taking fixed pips / day are excellant which i intend to follow with discipline but there gotta be couple of home runners to sustain unseen losses. the market doesn't care if you wanted to have a 1:1 or 1:5 risk reward so if you are keeping 15 pips : 15 pips...it might just move 8 pips in your favour & hits your SL !!! And you wish you had something to inform TAKE MONEY ON THE TABLE.....NOW !!!

you got to decide how much is enough in a strong trend & how less you can squeeze from a range, if taken trade in ranging !

Great thoughts,market is supreme.
And Vicky Ji I must tell you if anyone is using fundamentals he is rarely using smaller TF,so problem is for people using TF.

For Fundamentalist he know where are big boys going,so if EUR/USD is good fundamental buy,then buy on dips.
but consider a TA man who was trading countertrend/correction what do you say to him.
So again great thoughts by Mr Rishi here.
Regards
Tavnaz

 

[Tavnaz]

My Girlfriend was feeling neglected and gave me an option.... her or the forex. Boy do I miss her !!!

oh boy,did you really leave her.
She did not know, where all the paper comes from.:rofl: