Quote:
Originally Posted by andyfx
I have devoted the last 2 months (16 hrs a day) of my life to learning this system. I am not automated trading and don't think i ever will. Those trades were placed according to the trading system. I understand what you are saying about the going broke after a month. But i have now been into forex for over a year which i know is nothing compared to most. But really i am not struggling with making the pips, but the exit stratagies are a different matter.
Do experienced Live traders have pip/profit targets? I also have been reading up on trading psycology and taking what the market gives and not trying to take. I have closed all trades for today and am happy with that result so maybe i have answered my own question.
But again are pip targets advisable?
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You're asking the right questions Andy! Sounds like your serious about trading - good. You HAVE to be. Its a business - not a hobby. Sounds like your taking a systematic approach to the entries and their criterion. GOOD. This is the key thing most newbies lack. If one trade goes against them they start looking for a new system. Systems suffer losses, thats just part of trading. Stick with your system, it looks like it has solid results, but don't bend your RULES EVER.
As you mentioned exit strategies are the HARDEST part of trading. I don't care what others may say, you can find entry signals from any number of the millions of systems out there and they will all work. The degree to which they succeed is directly related to the management and exits each system employees. I can't give you a 1-2-3 exit strategy and i'll be honest, i've tried it all. To answer your question - yes, traders use targets for exits and I would advise that you do as well. You have to know when to fold just as easily as when to get in. Personally I use Fibonacci Targets for my exits and try to systematically reduce risk on the way down as the trade works in favor.
If you want some possible exit strategies, look possibly at something really simple, like maybe an RSI extreme reading, or a slow stochastic moving into extreme territory. If nothing else they could give you a general idea on how extended the current move is and if you should start locking in profits or closing out positions all together. Take a look at them and see if they would've helped or hurt your profit results and then go from there.
Also, pick up the book "Trading in the Zone" by Mark Douglas. Its the best book i've come across on trader psychology and its a MUST read before you go live. Otherwise you'll be doomed to commit all the mistakes he outlines in the book in real life and have someone else walk away with your hard earned money.
Hope this helps!