Exit, Stage Left

As I have said before, for me EXITS are more important than entries. Again, as Pete Steidlmayer told me:"Just get the trade on and manage it".

Money Management is the key to profitability. It is THE holy grail. How and when you exit quantifies and determines whether you are exiting at a profit or a loss and how much.

My exit strategy is a key part of my trading plan. As I have said about Flo, it takes a lot of smaller profits. Why? because of the trading plan: Lots of entries, exits - HFT. In my discretionary trading, the trading plan is different. I get a trade on with the visibility of a profit of at least the first logical scale point. I don't have any certainty whether there is any more in the trade. I have my envisioning where I have a possibility in mind like the short trade yesterday in the ES, but no real certainty. My plan calls for a first scale based on either a monetary target equal to me drop dead stop or at a first logical scale area. It then calls for me to manage the trade scaling out or exiting all, depending on what I see.

To find my exit points, I am paying attention to support and resistance in both the Profile and the EMAs. These are logical scale points.

There are other things I look at: CCIs when momentum turns or runs out coinciding with something else. I use the MomDots too. If it has been a trade that has lasted more than about 5 bars, the MomDots give a good exit with the knowledge that if I have exited too early, I'll get a re-entry after that pullback.

Other people I know use ATRs (google it) as an exit as they adjust to volatility. Still others use a number of range bars stops. There are lots of ways to exit but I suggest that both consistency and a thought out exit strategy in a written trading plan are very important. It's not very efficient to try and make this important decision on impulse during the heat of battle.

Another fun day at the office. I traded the 6E in the morning again and then went to the ES. I first traded the gap back down to the top of yesterday's Profile. Even though the southern tail was double prints, it was pretty clear we were going north after the down action. I had a couple of good trades as the market went up until that Fib number stopped the action for me right at the upper Keltner area. Time to take the dog for a walk. If price explodes past the Fib top then it will be interesting in the U.S. afternoon.