Exit, Stage Left, Again

As traders, we control our entries and exits. We go to a lot of trouble to work out how to enter. However, profits and losses are made by exiting in trading. Its not like buying an undervalued piece of property and then selling it for its fair value.

Yet in looking at lots of trading plans, all I see is a stop loss and some generalised profit rules. In writing entry rules, I see detailed minutiae description to the nth degree. Why are exit rules not described in such detail?

It would be easy if our exit was the opposite of our entry. But we have learned by now that nothing in trading is quite so straight forward.

Our exits depend partly upon what type of trader we are and what time frame we trade. A scalper will exit differently than a swing trader although their entries may be quite similar.

Markets do not move in straight lines but are a series of moves and pullbacks until the pullback becomes a reversal. We can get rid of a lot of the noise if we want by using range bars. What needs to be done is deciding how you want to trade these advances in trend and pullbacks. Are after an exit at every peak and an entry at every trough? Or will you let a series of advances and pullbacks continue until a target? These are just two of the choices. Exits can be more complex than entries. Thought and back testing will reveal what is both profitable and fits your emotional profile as a trader.

I will be spending a lot of time on this in the training, helping the attendees finding their exits.

BTW, I just noticed that I had passed the 200 post mark almost 2 weeks ago. It really surprised me. I've enjoyed watching Kiki and lot's of the readers to this blog achieve CP and greater profitability. I'm anything but a humble person much to my Mother's consternation but it really feels good to have made a difference. Thanks for all the feedback, please keep it coming as it motivates me to write the blog.