My entry strategies are fine, hitting 75% plus accuracy for entry (H1 chart with h4 directional confirmation, m30 timing). 1-4 hr positions during New York morning trading session (no yen, mostly eur/gbp/usd/cad).
My Exits are haphazard. I jump out at the first retracement and sometimes re-enter after consolidation.
I have tried bolly bands, using tymen’s strategy of exiting when the first candle separates from the bands. any suggestions on other exit strategies? (my standard indicators are: modified versions of MACD, Force Index and Stochastic). Interested in other traders’ thoughts and approaches.
Without seeing your entries and current exits its a bit hard to give suggestions. Perhaps you could post a few typical examples.
One that I use to avoid early exits is to look at the number of “legs” in the current move. If I’m on the first leg, I won’t exit. If I’m on the second one, I might exit if I have a decent profit otherwise let it run and hope for the third leg. I would definitely exit when the third leg starts to retrace.
One indicator that works well for exits is Heiken Ashi. Just be aware that it keeps you in trades longer than you might like.
never heard that term before. is it a reference to some type of wave theory?
example of entries: short usdchf 1/13 at 8:42 EST
EURUSD Jan 13 buy at 8 am EST
I got out too early on the last one, grabbed cash and closed which is part of my problem. I have certain rules that prevent me from holding onto losing trades, but haven’t developed a rule set to give me brass balls (and targets) to exit. I generally look at the 20,50,100 and 200 day moving averages (I keep them standard on my chart) and draw fibs based on H4 as predicted retracement areas.
I was using this before I heard of wave theory and I still can’t quite get the terminology right. I seem to see things differently than others as to when things start and end.
Anyway the attached will give you some idea of what I’m talking about. No third leg for one. The other’s big move was the third one; usually the first or second legs are the big moves.
As a previous poster has said, this does depend rather on the strategy being used, but one approach I often use is to move the Stop to B/E after four bars, then trail it up from there to lock in profit at 1% increments, with a little room to breathe. I always risk 1%. I tweak the placement of the locking-in Stop if there is a clear resistance area around the 1% price.
OOOH, this is good. If you don’t mind, which time frame do you generally use? I’m doing same day swing, not brave enough to go intra-day yet and take my eyes off the screen.
I don’t mind at all. I am a trend/swing trader, predominantly, so I trade a number of different currency pairs on a few different timeframes, as for me a clear trend, S&R, cycles etc. is more important than ‘learning’ one pair or specializing in one timeframe. These days I enter mostly on the Daily or the Hourly charts. I take trades on the 240, too, using the same strategy, I just find that I get nicer setups on the Daily (which I let run for several days) and the 60 (which I am happy to run overnight if it is with me, but obviously it can run its course during one day). I am shortly going to try running the same strategy with entries on the Weekly, which I expect should operate similarly, I just have not tried it, yet.
That said, I used to enter trades on the 5 minute chart, and used the same exit rules and they seemed to work fine.
The logic behind my moving the Stop to B/E after four bars is that I believe that if the trade is not moving with me by then (obviously entering on the Daily this is giving it four days, on the 60 four hours and so on) then it is likely not going to. My entries are often bounces off a trendline, resistance zone etc. I don’t like a bounce that does not have much bounce!
The logic behind locking in profit in 1% increments (or thereabouts) is that I risk 1%, and my initial target on a trade is 1:1, hence I look to lock in 1% once I have it.
I hope that that clarifies my thinking, do say if I have just been confusing! There are many different takes on how best to exit a trade, but this works for me, but then I guess I would say that!
Hi,
Be aware that your investors will have their own exit strategies. Be prepared to discuss their desired timetable for exiting your business, how they see it happening and their expected return on investment.
