Early exits are killing me.
- Thread starter EMini-Player
- Start date
Quote from Fast_Trader:
Stress-free trading? What's that?
-FastTrader
Its another way of saying "total confidence that your system/s will win in the long-run"...
why so many problems?
There is no rules or books that can teach common sense.
Are you a position trader working on High TF? so you'll have a high R/R Ratio, . Do you feel like this?
Are you conservative day trader ? use a 1.6 R/R ratio.
Do you have common sense? so follow it. You a re on chair that can slide back and forth. Only you can decide when exit your position.
There is no rules or books that can teach common sense.
Are you a position trader working on High TF? so you'll have a high R/R Ratio, . Do you feel like this?
Are you conservative day trader ? use a 1.6 R/R ratio.
Do you have common sense? so follow it. You a re on chair that can slide back and forth. Only you can decide when exit your position.
Quote from Fast_Trader:
I trade equities, and one problem I've been having is early exits. When I analyze my trades, all of them would have netted me about $500 on 1K shares, but since I exit too early (within 2-4 minutes), my profit is nothing to write home about, and sometimes I even take a loss on a good setup which would have been profitable had I held on for a few more minutes.
I'm hoping some of the experts here went through a similar dilemma when they started, and can provide with some information on how to deal with this problem. Should I just enter my position with a trailing stop, and only exit when my profit target gets hit or the stop gets hit? Any help would be appreciated. If it helps, I can post the trades I took this morning for further analysis.
Thanks.
-FastTrader
When I first started I trading, I blamed my losses and early exits (which I also saw as losses) on the "conspiracy theory". The moment I got in, it stopped moving. The stock would move against me, then I would get out for a loss or exit early, and the moment I got out they ran the stock higher. It was truly a wild evolution for me. I went from no discipline, to too much discipline, the point where I started cutting profits. This is what I have done to become a consistently profitable trader.
Before you enter a trade you must have answered five questions: 1) What is my entry? 2) What is my stop? 3) What is my target? 4) What is the risk reward? 5) Am I comfortable with the risk reward ratio. If you don't know the answers to those questions you are gambling. If you don't stick to those numbers you will have no clue why you're in the trade, and you will lose.
If you're using TA for your analysis you know what all those entry and exit points are. Just entering the stock, setting a stop and waiting for "the market to decide where your target is", is no different than submitting to the market and letting it lead you. There are sellers camped out every peak, who are just waiting to smack the bid because they are so damn happy the stock has come back to their breakeven.
With TA, on longs I place my targets just below major and minor resistance levels, and the reverse for shorts. If the are is somewhat thin, and the stock has gone in with above average volume, I put out little offers above resistance to see if they're snagged. Another thing to consider is scaling your way in and out of the positions. This makes more sense when you're trading something with a wider reward range, 1,000+ share size, and you have a reasonable commission structure with the B/D. Scaling does not give you the best average price, but in return for that you have a trade that is delivering. If you want to consider scaling, and have a higher commission schedule, you can give the B/D a call and ask them to negotiate the ticket charge. Many firms won't budge and some will, you may be surpised, it doesen't hurt to ask.
As far as trailing stops are concerned, it makes perfect sense to do that as the stock trades into and through your target. If a stock is going through my target, I'm out of most of my position. Don't forget, you can always trade them again, they're not going public, they'll have setups again, and if you know the stock well you can play the retracement.
I am very clear about my entry and exit points before I enter a trade. If I trade larger size on a particular stock, I scale in and out of it. Getting back to entry, stop, target, and risk reward ratio remember this: If you predetermine all of those you have nothing to fear, because you accepted the risk and know what the reward is. This will dramatically cut down the size of your losses and frequency of premature exits.
The real challenge is sticking to your plan while you're in the trade. Once you're in and have placed your automated stop, the rest is just noise. You have to bear down, be strong and manage the trade in between. I trade very actively and successfully, and when I see and hear concerns like these, I go back and think of how my trading evolved over the years.
Feel free to P/M with any questions or comments.
RAMOUTAR, thanks for the great post. I might PM you later today with some specific questions.
-FastTrader
-FastTrader
Thanks for your reply. So it sounds like 3:1 in a trend-following context is a real possibility. That's going to be helpful as I move forward because I'll know I'm still on the right track even if I run into 6 losers in a row.
But if you don't mind, let me raise another question. My observations so far show a) a good
number of unprofitable trades -- some are breakevens which makes the percent unprofitable somewhat easier to bear, b) a couple of 3R trades where I get my 3R by the skin of my teeth and have no regrets that I'm flat again, and c) one or two 3R trades where I think what a shame to have taken 3R off the table: "Man, you coulda had 8R, but now you're gone." Do you have any thoughts on that?
As for your .png, I'm intrigued by it: What made you pass on the retracement that occurred between the two you marked? Didn't dip down far enough? I guess I'm projecting my own issues onto your chart. Some of the big questions in my mind are: how much retracement is enough? How much retracement is too much? That kind of stuff. (Too many damn questions? Sorry.)
I've got " Methods of a Wall Street Master" coming in via inter-library loan. Thanks for the tip.
Interesting Greenspan article, by the way.
But if you don't mind, let me raise another question. My observations so far show a) a good
number of unprofitable trades -- some are breakevens which makes the percent unprofitable somewhat easier to bear, b) a couple of 3R trades where I get my 3R by the skin of my teeth and have no regrets that I'm flat again, and c) one or two 3R trades where I think what a shame to have taken 3R off the table: "Man, you coulda had 8R, but now you're gone." Do you have any thoughts on that?
As for your .png, I'm intrigued by it: What made you pass on the retracement that occurred between the two you marked? Didn't dip down far enough? I guess I'm projecting my own issues onto your chart. Some of the big questions in my mind are: how much retracement is enough? How much retracement is too much? That kind of stuff. (Too many damn questions? Sorry.)
I've got " Methods of a Wall Street Master" coming in via inter-library loan. Thanks for the tip.
Interesting Greenspan article, by the way.
seems to me you're looking for a qwick fix in the chart or your system... to me it's all in your head...
i know, i have the same problem, like many other traders...
*stops too tight is FEAR of losing money
*jumping out too soon is GREED
solution:
*a complete indifference to money
*the willingness to trade well regardless of anything else
*outgrowing fear and greed through hard work
hope this help
ik
i know, i have the same problem, like many other traders...
*stops too tight is FEAR of losing money
*jumping out too soon is GREED
solution:
*a complete indifference to money
*the willingness to trade well regardless of anything else
*outgrowing fear and greed through hard work
hope this help
ik