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I actually attended an Options Animal Seminar last week (Dont hit the back button yet - LOL) and the presenter made an interesting point. Most of the training that's out there, especially paid training) focuses on ways to get into a trade.:

  • Technical Indicators
  • Chart Patterns
  • Price Action
  • Trading Setups/Strategies

 

Yet, they tend to not address what to do while in a trade. We all know that emotions can cause us to do things that destroy our trades. Exiting trades too soon or Holding on to losers way to long.

 

So, I wanted to ask the forum what strategies you use to manage a trade

 

For me, I control emotions by clearly identifying my risk / reward before entering the trade. I manage my expectations. I know we are supposed to be unbiased, but when you put on a trade, you do have an expectation.

 

In addition, I ask the following question to try and identify why the criteria that I set and followed to enter the trade may have changed:

 

What has changed about the trade?

  • Is it fundamental? - The company has been cooking the books
  • Is it Technical? We broke a key price level
  • Is it Sentimental - typically fast move in one direction and then returns
  • Is it Macro Economics - Economic Calendar Events

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I place the majority of my attention where I spend the most time ... waiting for the context and setup to signal entry ... but I agree that the time one needs to be most disciplined is when the emotions are likely to be strongest. The reason is that the right context and setup lead to a 75%+ win rate to first target and there is almost never any manual intervention in that trade.

 

So for me, the phases of trading are:

- waiting for context to be clear and then for the setup to appear

- taking the setup

- setting the stop mechanism (I partially automate my trading so I don't have to watch every tick) and the initial target

- managing trade, which mainly consists of doing a few sit-ups and slow breathing to disperse any stress for the 1-30m my average trade lasts, but may include a manual exit

- resynchronizing myself like a tennis player so that each trade, like each serve is treated independently of every other serve in the game.

 

In the managing the trade stage I have an extremely specific set of reasons for manually exiting or altering the automatic exit. All are purely technical:

 

. 3rd advancing swing

. 3rd attempt at same break

. Confirm reversal by 3 pts

. Opposing ma color w/o channel

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Example of using CCI for exit management:

notes on chart should clarify

 

"3 Strikes & Out".

three attempts by CCI to get back above +100 fail

exit when CCI crosses below ZL (zero line)

 

Re-entry:

CCI TLB (trendline break),

CCI crosses above BOTH -200 and -100

Swing Low Pivot occurs:

5aa710533767f_RAI3strikesexit.thumb.png.9605348f7b74891056c3e1753c56bf76.png

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