[firewalker]

Originally Posted by wasp »

No, no, no, no, no!

Exits shouldn't be haphazard guesswork with scaling out and hoping for the best.

Entries and exits are equally important and as much effort should be made to ensure your exit is as near perfect as your entry. Until you can contently exit with near certainty that it won't continue, keep working at it.

People try to get the best entry using the minimal required stoploss and the same should be for exits.

I said "You can just leave one car on till EOD and say to hell with it, move your stop breakeven and see what happens." Obviously that's not the best way to trade because you're not applying an exit strategy, but I was surprised myself to see how many times that would've actually been a more profitable way to approach the exit then just exit on the first sign of trouble.

I agree that exits are important, but that doesn't mean you can always determine when "it won't continue". Take a look at the chart I just posted. There were several times where I thought "hmm this isn't going to continue lower this is chop", yet near the end of the day price did fall back all the way to support.

But it took considerable time... that's why I said "to hell with it" referring to anything that happens in between your entry and your exit, if you have things planned out AND if you know what you are looking for (which can be S/R, fibs, a fixed target, a trendline break, a time signal, a price target based on the ATR, etc, etc).

Imo, if you focus on one single exit, you'll never catch the big swings. I know you manage to catch each swing almost by surgical precision, but you can get yourself seriously burnt when you end up reversing and reversing in choppy circumstances...

[wasp]

Originally Posted by firewalker »

I said "You can just leave one car on till EOD and say to hell with it, move your stop breakeven and see what happens." Obviously that's not the best way to trade because you're not applying an exit strategy, but I was surprised myself to see how many times that would've actually been a more profitable way to approach the exit then just exit on the first sign of trouble.

I agree that exits are important, but that doesn't mean you can always determine when "it won't continue". Take a look at the chart I just posted. There were several times where I thought "hmm this isn't going to continue lower this is chop", yet near the end of the day price did fall back all the way to support.

But it took considerable time... that's why I said "to hell with it" referring to anything that happens in between your entry and your exit, if you have things planned out AND if you know what you are looking for.

Imo, if you focus on one single exit, you'll never catch the big swings. I know you manage to catch each swing almost by surgical precision, but you can get yourself seriously burnt when you end up reversing and reversing in choppy circumstances...

When you look to enter into a trade. One of the main things you concentrate on is getting in when it will go against your entry the least. Why should it be any different for an exit?

[firewalker]

Originally Posted by wasp »

When you look to enter into a trade. One of the main things you concentrate on is getting in when it will go against your entry the least. Why should it be any different for an exit?

No, I agree, if you get the entry right you should try to squeeze out as much points as possible. But if just don't think there's a simple way to accommodate for the market dynamics. You can never know for sure if price is actually going to travel from one end of the range to the opposite. But you can manage your profits, with your eye on the big prize, not afraid to settle for 2nd prize when the odds of winning fall below your threshold...

[wasp]

Originally Posted by firewalker »

No, I agree, if you get the entry right you should try to squeeze out as much points as possible. But if just don't think there's a simple way to accommodate for the market dynamics. You can never know for sure if price is actually going to travel from one end of the range to the opposite. But you can manage your profits, with your eye on the big prize, not afraid to settle for 2nd prize when the odds of winning fall below your threshold...

You are missing my point FW. Its not about getting the 'maximum of the range' and 'squeezing out profits' but treating the exit with as much respect and thought as the entry. You don't scale into your entry do you? You get in full confidence that a high % chance it is the best possible point (the high or low). The same thing should be for the exit imo.

[firewalker]

Originally Posted by wasp »

You are missing my point FW. Its not about getting the 'maximum of the range' and 'squeezing out profits' but treating the exit with as much respect and thought as the entry. You don't scale into your entry do you? You get in full confidence that a high % chance it is the best possible point (the high or low). The same thing should be for the exit imo.

Why don't say so straight away that you were advocating an "all in-all out" strategy
As for not scaling in, that's true. A lot of people would advocate that pyramiding is a better strategy in the long run though.

Your idea would be nice, in theory. But in reality, you enter a trade and you see if or not price starts going in the favourable direction. In reality, where would you have exited that short (see chart I posted)?

Once you're in a profitable position, you're no longer viewing the exit as an entry. Suppose you have 10 points, do you want to risk giving up 10 if there's a 50% chance to gain another 10? What if there's a 33% to gain another 40? You might argue that you have no way of knowing these chances, but that's another case.

Over the long run, it's what you feel comfortable trading with that matters. Some people have no problem seeing 5 profitable trades return to breakeven, but I do. I'd rather take my 10, leave a small position on, but run for the exit in case the market fails to continue (this leaves the possibility for re-entry).

But this isn't about me, this is jason's thread

[wasp]

Yes you are correct and I think it best if we wait to see what Jason wants and continue this on the trade discussion thread rather than derail this one.

[wasp]

To continue and stop derailing Jasons thread.

IMO, the exit should take on the same criteria as the entry. ie, as close to the high/low as possible and with minimal movement against ones position.

I don't agree in scaling out and think the exit should be considered as carefully as the entry and perfected as such.

To scale out is to admit ignorance and how one can justify emphasis and such detailed thought on entry only to leave the exit to chance is bizarre imo.

[firewalker]

Originally Posted by wasp »

To continue and stop derailing Jasons thread.

IMO, the exit should take on the same criteria as the entry. ie, as close to the high/low as possible and with minimal movement against ones position.

I don't agree in scaling out and think the exit should be considered as carefully as the entry and perfected as such.

To scale out is to admit ignorance and how one can justify emphasis and such detailed thought on entry only to leave the exit to chance is bizarre imo.

Well, there are two things you are saying.

First, leaving the exit over the chance is not what scaling out is about. In fact, scaling out is anything but chance because you have determined beforehand at what point you will exit a part of your position. This may be for several reasons, a break of trendline, a predetermined fixed target or something else.

Second, when you enter you have your stop to protect you in case you are wrong. When you exit, and price goes further in the right direction, there is only hindsight to say that you exited too early.

Imo there is no way in knowing with 100% certainty what is going to happen after you exit, the same way there is no way in knowing for sure what price is going to do. But you can be 90% sure perhaps. Which doesn't change the fact that pinpointing the optimum exit isn't an easy feat. Because how do you define optimum? Is it the farthest price has traveled during that way? What about overnight?

More important imo is the potential reward versus the risk of getting out with nothing and giving back all your profits. Over the long run that will determine the net profitability of your strategy...