Early exits are killing me.
- Thread starter EMini-Player
- Start date
I know this post was not directed toward myself. But this was a problem that I overcame and helped me become profitable.
Even if you only shoot for a 2-1 ratio you can have horrible accuracy of 34.2% and still come out even! Now let those gains run to 3-1 and you`re in business. In the long run you will have a lower winning % but you`re ROI will be higher.
Good luck and stress free trading.
C.
"Trailing" stops...they trail and move with the price, so it would get hit if/when the price moved down later in the day.
-FastTrader
Stress-free trading? What's that?
-FastTrader
Fasttrader:
May be a restatement of previous advise but try to develop your approach to take a predetermined % of the market breakout based upon your analysis of stock breakouts with similar characteristics of what you've chosen. Also for the Q's. Do backtesting though.
You can backtest without programs, takes longer though. Once you come to a conclusion of reasonable profit targets, under similar market conditions (market conditions are never the same), stick to your backtested figures till the market proves you wrong.
Don't worry about not catching the entire move after that. As long as your win/loss and profit targets remain reasonable, you'll be well ahead of the game.
Much Success to all,
Fast_Trader:
If youâre constrained to only trade the first hour of the market open (and sometimes only the first ½ hour, like today), due to your other job schedules, then it is to be expected that your profits will be limited to what the market makes available to you during that allotted time slot; as youâll have to exit your position(s) â go flat, before you head out the door for work (if thatâs your strategy). If I had all 7 hours to which I can sit and follow the market, then Iâd expect to be able to capture larger moves as they play themselves out during the wider window. However, my impression is that the early exits which you are speaking of, really transcends the fact whether you are operating with a 1-hour window or a 7-hour window.
Perhaps itâs best to start by answering to yourself why you have chosen to exit the CVTX at 30.44 or BRCM at 24.61 or NVLS at 35.82. If they are due to the same reasons of âlack of timeâ as was your QQQ trade, then my initial statement seems to apply. On the other hand if each (with the exception of CVTX) all went further AND was within your 1-hour window, then youâll have to examine a different âwhyâ.
If it is not an issue of time limitations and there is the tendency is to exit trades just shortly after price leaves the gate then it seems that you might be trying to increase your tally of winners over losers. Itâs not so much how many winners you have over how many losers but how BIG your wins are over how small your losses are that will carry you through the day/week/month/year.
If getting out of your position when itâs about mid way through the move is more the prevailing habit in your trading, then I would try to revisit the 1st point made just above AND use some sort of a close trailing stop. Again, I am assuming itâs not a time constraint issue.
Finally, if youâre getting out when price is close to or just shy of your target, then it becomes more a matter of using your experience and intuition. Do you hang on waiting for that last couple of points/ticks to occur or just cash in? Is the market showing signs of hesitation in trying to reach your target (but then, the market doesnât really know you have whatever you refer to as your target anyway) or is it on an unstoppable thrust towards your target and possibly beyond? Maybe youâll have to reevaluate the mechanism(s) by which you compute your targets to begin with.
Anyway, those are just a few pertinent areas that I can think of.
Kermit
If youâre constrained to only trade the first hour of the market open (and sometimes only the first ½ hour, like today), due to your other job schedules, then it is to be expected that your profits will be limited to what the market makes available to you during that allotted time slot; as youâll have to exit your position(s) â go flat, before you head out the door for work (if thatâs your strategy). If I had all 7 hours to which I can sit and follow the market, then Iâd expect to be able to capture larger moves as they play themselves out during the wider window. However, my impression is that the early exits which you are speaking of, really transcends the fact whether you are operating with a 1-hour window or a 7-hour window.
Perhaps itâs best to start by answering to yourself why you have chosen to exit the CVTX at 30.44 or BRCM at 24.61 or NVLS at 35.82. If they are due to the same reasons of âlack of timeâ as was your QQQ trade, then my initial statement seems to apply. On the other hand if each (with the exception of CVTX) all went further AND was within your 1-hour window, then youâll have to examine a different âwhyâ.
If it is not an issue of time limitations and there is the tendency is to exit trades just shortly after price leaves the gate then it seems that you might be trying to increase your tally of winners over losers. Itâs not so much how many winners you have over how many losers but how BIG your wins are over how small your losses are that will carry you through the day/week/month/year.
If getting out of your position when itâs about mid way through the move is more the prevailing habit in your trading, then I would try to revisit the 1st point made just above AND use some sort of a close trailing stop. Again, I am assuming itâs not a time constraint issue.
Finally, if youâre getting out when price is close to or just shy of your target, then it becomes more a matter of using your experience and intuition. Do you hang on waiting for that last couple of points/ticks to occur or just cash in? Is the market showing signs of hesitation in trying to reach your target (but then, the market doesnât really know you have whatever you refer to as your target anyway) or is it on an unstoppable thrust towards your target and possibly beyond? Maybe youâll have to reevaluate the mechanism(s) by which you compute your targets to begin with.
Anyway, those are just a few pertinent areas that I can think of.
Kermit
I know very little about risk-reward ratios. Can anyone suggest material to learn more about the subject and it's applications?
I've read the following:
Alexander Elder: Come Into My Trading Room
Donald Cassidy: It's When You Sell That Counts
Steve Nison: Japanese Candlesticks
None of these discuss the subject.
Of course any feedback would be appreciated.
Thank You
Jorge
I've read the following:
Alexander Elder: Come Into My Trading Room
Donald Cassidy: It's When You Sell That Counts
Steve Nison: Japanese Candlesticks
None of these discuss the subject.
Of course any feedback would be appreciated.
Thank You
Jorge
Don Miller and Tony Oz are excellent risk/reward traders.