Good entries: 101 for newbies

[harrytrader]

On whether the entry point is important or not, you will always hear one opinion and its contrary . Since there are more swingers than scalpers one will hear more often that exit is more important than entry whereas for scalpers entry is very important. As usual all depends on the context of the framework chosen: even in the context of swing, there are two subschools, those who trade with stochastic signals that is to say bad quality signal - so bad sometimes that they have to pretext that it is because they don't try to predict the market but rely above all on money management - then I would advise them to just rely on a coin to do so it would be less effort - those who trade with more technical approach with a good percentage of winners then they have to also chose their entry for example elliotist will enter after the break of wave 1 or after the end of wave 4 consolidation.

P.S.: Listen to other opinions but after try to think and understand by yourself.

 

[wally_]

Every fool can enter a trade, but it takes a wise man to exit it.

You think I am wrong?
Here are two observations in favor of this opinion:

1. There are some chatrooms out there where only entries are called and not exits. Why? Because it is much easier to enter than to exit.

2. I have yet to hear about the undertrading problem, whereas the overtrading problem is very well known and plagues many a rooky trader. Why? Because it's so easy to enter and if one does not know how to exit properly one is bound to keep re-entering in order to truly reap the benefits of entries.

I just gave you an example of one entry in ES that would produce 3 different profits for different exits: 6, 9 and 21 (MOC) ES pts. Yes, it was a very good entry, however if you exited the trade after 3 points, it would be a good entry only, but not a good trade.

I choose my entries very carefully, but I believe that you become a good trader only when you master the art of choosing the exits at least as well as choosing the entries. And the former is harder than the latter.

Of course, the problem of exits does not even begin to exist for the scalper. Scalping is a very extreme type of trading, where exits are either a fixed target or a fixed stop-loss and usually there is not enough time to handle the exit in any other way, that is by adjusting the stop-loss or the target.

Just my two cents for today...

 

[illiquid]

Seems to me that perfecting entries and exits are pretty much the same game after a while -- one's ideal trade is to take out the maximum amount of any given move. The beginning trader usually starts out in the middle, chasing a bit after the momentum has already started, and getting out much earlier to lock in a small gain. Slowly but surely, he learns to take out more and more of the given move, being better able to spot a move earlier, while having more patience with winning trades to sit for bigger gains. Eventually, especially in intraday trading, one figures out that the best exits also make the best entries going the opposite way -- at that point entry and exit become one (ie trading nirvana?!? ).

But I would consider learning entries as more of a priority than exits for a developing trader; anyone can (and perhaps should) set automatic fixed stops to get you out of losing trades, but learning when to identify your edge and the patience in being able to sit on your hands and trade only when that time comes seems a bit more important.

The road I took went as follows:

1. Identifying an edge.
2. Cutting losses.
3. Patience on entries/avoiding overtrading.
4. Extending gains/patience in winning trades
5. Using exits or perceived "ideal" exits to initiate entries the opposite way.
6. Increasing size and staying the course.

 

[traderkay]

Quote from wally_:


1. There are some chatrooms out there where only entries are called and not exits. Why? Because it is much easier to enter than to exit.

That simply allows them to avoid having any kind of a sensible track record.

 

[Vishnu]

Quote from traderkay:



That simply allows them to avoid having any kind of a sensible track record.

I 100% agree with that line. I write for Real Money Pro and attempt to detail entries and exits in each trade I post about. That said, I would NEVER trade off of a recommendation on a site. Develop your own edges through research and backtesting. If anything, try to learn some of the ideas and methodologies of the people on the sites and then maybe backtest them to see if they work. 9 times out of 10 they won't.

Are entries important? Yes. Are exits? Yes. But with 100,000 other intelligent futures trades out there the only way to win consistently is to be confident you have edge. Certainly making positions some website recommends is not going to be an edge.