Exit Strategy for a Newbie

My trading recipe is a combo of Ichimoku, Guppy and Stochastics with Fibonocci Retracement thrown in for extra seasoning. I have (generally) dialed in a pretty good entry process based on support levels and Fib Retracement.

I am having major challenges in building a good exit strategy. I have had numerous positions where I would have 100-200 pips in profit and want to just exit for the purpose of locking in those profits, but I don’t want to close my winning positions. As such, when they invariably pullback I end up losing 50% of the gains, get stopped out then the position goes on it’s merry way making profits again.

With all of this, it has really messed with my mental state around which time frame to trade and how to use multi-time frame strategies.

1H is too stressful for me, but I keep feeling pulled to that level to “find a trade”,
4H seems like it is the gateway drug to the 1H for me but it “calm” enough that I can go about my day and not have to check my screens all the time.
1D is where I am most calm.
1W is wayyyyy to slow.

Any ideas, thoughts, questions or suggestions?

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Great question, possibly the most difficult question in trading. I have two possible ideas how to deal with this but they’re not complete and scientific solutions.

Firstly I just get out when momentum as depicted by D1 bars seems to slow down. My trades are trend-following so any slow-down or plateauing is enough of a warning sign. Obviously, in most cases these things are also precursors to a resumption of the trend and as soon as I’m out I’m looking for the next entry signal in the same direction.

My thinking on a second option is incomplete but I’d like it to be a more methodical method - maybe breach of a previous fractal pattern: maybe 3 adverse closes or sequence of 3 adverse D1 HL bars. I’m still working on it.

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You could scalp 30-50% of a winning trade, move the S/L to breakeven then run the balance with a trailing stop.

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Try to make tests with different exit types if it is possible.

As Tommr said: Momentum is the key for your problem. By checking the D1-TF and momentum you could decide if staying in the market is still good or bette leave and (hopefully) locking in your gains :grin:

Ps W1 is too slow, yes I agree with you, however you could use W1 for determining to go long or short. New year new strategy: I’m working on a W1/D1 short term swing system and also had the problem of don’t knowing if I should close the trades and lock in profits or let them continue to run till they reach TP, however 2 of 5 trades reached TP tho, rest was closed yesterday by me cause I knew I wouldn’t be able to watch my charts today and I don’t like keeping trades open over weekend

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I’ve been closing my trades at the EOD if a strong candle has been produced that day. Close it, wait for the pullback then get back in.

There’s no shame in locking in your profits.

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-honestly i don’t think you can accept any tp method ,because too much greed in you.
-you want maximum profit and hate drawback?dont you think its contradiction?
-so don’t ask others ask yourself ,to what extent you will risk and where’s your bottom line is .
-take me for example ,i knew what i want is "relatively high profit ",so i set tp at bigger time frame’s oversell/overbuy area.so im happy that i took my profit at a relatively high level ,im content.
-what about the “potential future profit?” ,i reenter the position again ,right there ,right then .
-does that make any sense ? well ,as long as im making profit ,who care?

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Wow…thank you for the honesty! I think you are right.

I was reading “Trading in the Zone” about a week ago and the author talked about that exact thing and when I read this it was a light bulb moment. “Optimizing” my profit is only going to cause me to keep playing with the system and eventually break it.

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any kind of trading strategy can be useless if there is no perfect money management, so we the traders should focus on money management first of all.

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New traders exit quickly when they see a trade is losing. They don’t have any good trading strategy to operate trading so they do so.

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I started with copytrading in order to see, how the pro traders work. That helped me to create successful strategy.

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It all depends on what type of trader you are, timeframe and your entry rules i.e., strategy / plan you use, including indicators etc. You got to be comfortable. Many traders use market structure, trend lines, S/R, PSAR, ATR, Fractal, MAs, BB, MACD, Fib etc. It’s your choice - look in to stats such as pullback (when it occurs and the extent). But don’t try to milk every pip by trying to pick tops and bottoms. We play game of probabilities - not certainty!

I personally like scalping stock market indices for a fixed amount - again depending on the volatility. I am content if I can get about 30% of the average daily range (ADR) by taking no more than three trades!

If newbie traders always follow sudden strategy exit policy, they may prone to lose from the market.

Newbies follow a common strategy that is they close their trades when they see that they are failure to carry profit.

Newbie traders should keep rectifying their strategies because if they keep doing so, they will be able to make a good strategy ultimately.

Hey what’s sup bro !
If you are a Candle stick trader I recommend a book called “Naked forex” the guy teaches you about 3-4 exist strategies ,but yea sometimes the exist is the hardest part no cap :joy::100: