Hi guys and gals,
Been some time since I’ve had time to visit my favorite forum. Been trading every and any time I had. I’ve been using the most complex strategies I could find with boxloads of indicators. The more difficult the better it should work, right? WRONG! I lost $300 in 2 months, this is after demo testing it for 2 months and making GOOD paper profits!
So… I went back to demo, but this time deciding to go for something simpler, and what simpler than sma crossover on daily and weekly charts. I’m $100 up at this moment, 2 weeks live trading, it should have been alot more though!
Before my question, first my simple strategy: when sma cross: enter trade= no tp and sl set at 5 day average pip movement. Exit trade= when sma cross again, and immediately open a trade in the other direction.
It’s really working well for me! Now the question: how can I profit more from my trader. Most times when I’m in a trade thats going my way and the trend change the sma’s take a while to cross. I would stay in the trade - being faithful to my strategy- and end up leaving anything between 50 and 500 pips on the floor. HOW CAN I OVERCOME THIS? Does anyone have a exit strategy I could implement into my strategy? Eagerly awaiting any response!
Price action can be your best friend.
Trends will tell you they are in for a change, but you have to be paying attention.
We all leave pips floating. It’s just part of the process. Don’t overlook the fact that you are in profit, by ruing over what could have been.
Take what the market gives you, and move on, no regrets.
Thanks Master Tang,
Regret is what blew my first account, after losing some trades I up my lot size to just get back what I’ve lost. A big No-No I learned. With price action do you mean candlestick patterns and if yes, should I look at the same tf or shorter?
Since you seem to be a technical junkie, perhaps PSAR would suit your taste. It is an indicator for stops. Also, you might find that you dont lose as many trades if you use your cross for long term directions only. For instance if you use m15 charts, you can wait for cross to upside if hourly (or higher even) is also up. This will give you less fakes overall and probably a greater winning percentage.
There is no clear cut answer to exiting a trade. You might want to look into trailing the market using the Tenkan-Sen line from Ichimoku, though. It provides meaningful short-term S/R and is usually a good indication of price overextension (assuming it is only in retracement). Roughly, you’ll move the stop to the second-to-first level every time the angle changes.
[B]FAVORABLE EXCURSION [/B]
"The floating (potential) win attributable to price movement in favor of the position in any one trade. A Maximum Favorable Excursion is a metric developed by John Sweeney to measure the positive price performance of a series of trades before the trades closed with a loss.
For example, a trade closed with -50 pips loss but during the time it was open, at one point, it was wining 100 pips- that was the Maximum Favorable Excursion for that trade. This metric is used to determine reasonable take profit levels based on backtested results."
I started reading up on this, much thanks to MasterGunner, and its an excellent way to pinpoint characteristics of your trading system/method.
First at all, what is your win/loss ratio for yous system? 50%, 60%, 70%?
I ask you this because is important to know that before you enter a trade and establish your risk/reward ratio.
You are leaving money on the floor because you dont know when is enough. If you have a 50% win/loss system then a 1:2 ratio will keep you alive in the long term. If your SL is 20 pips, and right know you are 60 pips ahead, you can move your SL to secure at least 40 pips, because that will be a 1:2 ratio. get it?
Dont use Moving averages for exiting your trades because they will take you out of the position with a minimun profit. Find another way to exit your trades, like pivot points, fibonacci extensions, but most important: look at price action.
hope that helps!
I totally agree with this.
[B]Now if you go to my thread…[/B] 
http://forums.babypips.com/newbie-island/32400-finest-trend-trading.html
…on page 389 (latest page)
…you will find that I outline, complete with detailed charts, a fully detailed explanation of how to use of the parabolic sar and mid Bollinger band in combination to effect brilliant exits that most can only dream of.
"The floating (potential) win attributable to price movement in favor of the position in any one trade. A Maximum Favorable Excursion is a metric developed by John Sweeney to measure the positive price performance of a series of trades before the trades closed with a loss.
This stuff will fill your head with fairy floss but will do little to improve your trading!! 
MAE/MFE works extremely well if you have an edge. The problem is, most people trying to apply it simply dont have a clue, and they wouldnt know an edge even if they stumbled across one.
I must admit, I’m finding this all rather amusing.
I agree with Master Tang myself, if you can get to grips with price action you will find you have an edge in the market, not only for exits but also for entrys.
Symbafx i think i know what you find amusing, but let them get on with it. Its interesting to see what others use - and if it works for them then thats the main thing.
N
Im always looking for atleast 2:1 on a trade, if im looking for 3:1 or 4:1 the bit between 2:1 and 3:1 always kills me. As soon as im up 2:1 i know i have made a good trade and that i could exit now and be happy, at this point my stop is usually at BE so i know it could still turn into nothing! as soon as its at 3:1 i move my stop to lock in 2:1 so now i am garinteed a good trade:)
as for taking profit, i always found its best to take it when its there, when price is overextended anyway. so often you will be stopped on a pullback as its hard to guage what is a pul back or a genuine reversal.
Onething i read in a book along time ago is that the key to success is to “take money out of the market” that means to take it if you think the time is right.
If you decide to exit pre-maturely WRITE DOWN THE REASON WHY! this will help you with the emotions if it explodes in the direction you originally intended.
For example-
“I have decided to exit my trade, i am up around 1 times risk, and it looks like it is reversing on me, therefore i have decided to run. If it moves away now i will not feel bad as i had to make this decision REAL time”
You wont kick yourself so much by doing this!
[QUOTE=highland trader;206248]
as for taking profit, i always found its best to take it when its there, when price is overextended anyway. so often you will be stopped on a pullback as its hard to guage what is a pul back or a genuine reversal.
QUOTE]
That is a very good advice…
and dont torment yourself if after you close your position the price keeps going in your favor. You can always re-enter later. This one of the most important pshycologal aspects that traders need to master. That everyday comes a new opportunity.
Hi guys,
I’m new to trading so go easy on me!!
The title of this thread got my attention as this is something I’ve been looking into recently. I use Ichimoku to enter trades but I don’t feel Ichimoku is the best indicator for exiting trades. At the moment once I am in profit I close the trade and if the indicators are still the same I will re-enter a new position and again once in profit close and re-open. I realise I am loosing out on the spread each time but I’m happy with this method to bank profit so to speak. I could use trailing stop losses but I like the profit in my account.
I trade daily charts with trades lasting 1-4 days and I only trade with the trend. This is only demo trading but seems to going well so far.
What do people think of this method?
Any reason why your using SMA’s and not EMA or LWMA ?
i always prefer emas they seem more smooth than sma
Hi. I’m fairly new to trading too so I don’t know if this is of any help. Maybe some of the more experience traders could point out if there are errors in this method. I think you can lock in more profits if you use a better money management strategy. Open two trades with different profit targets. If the first is hit set your sl to break even or make it a trailing stop. That way your worst case scenario is you lose 2 small trades. Normal scenario you win 1 small trade. Best scenario you win 1 small and 1 big (equivalent to 3 small roughly). Not a good description but I’m sure if this interests you, you could ask a senior trader to explain it in more detail.
what if neither of them hit the profit target because both of them are stopped out.
That was the worst case scenario.
I guess what this is supposed to do is cut your losses quickly and let your winners run longer.
and anyway, you’re supposed to exit a good trade when your system says to exit.
In my own humble opinion, the simplest and most used exit is probably the PSAR. I’d try the default settings. If you believe it is still leaving too much unrealized profit unclaimed, you can adjust the step value to make it move a little faster toward price action.
If you still aren’t satisfied, you should try out Tymen’s variation using the standard PSAR and the 20 SMA (mid BB) combined. It shaves most of the profit off most of the best trades. He referenced it above.
A very simple but effective method is to just draw a trendline of the trade you are in and exit on the first candle that closes below the trendline (for an up trade). If that’s a little fast and takes you out of good trades a little too fast, then require the entire body of a candle (ignoring wicks) to be below the trendline to exit. If the price keeps moving down, you have exited with good profit, if it resumes the trend and moves back up and closes above the trendline, you can re-enter for just the cost of a few pips.
It only costs about 5 pips on average to exit a trade and re-enter. When you are in a retracement, you are risking pips, and it’s a bad risk since price is already moving against you. How many pips are you willing to risk with bad odds to save 5? 10, 20, 50, 100, 200? I’m just saying, it’s something to think about.