Great entries, horrible exits
- Thread starter illiquid
- Start date
murray,
I'm affraid you are giving this poor devil not much help. He wrote in fact:
" I will almost
always exit way too soon [!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!]
or hold way too long. "
To put it bluntly, he may better be helped by frankly hearing that he doesn't know what he is doing.
IMHO, nitro's comments are the more helpful ones. No 'good' entries can exist without the knowing about 'how' to exit. 'Managing' is only something akin to reading tea leaves.
Illiquid,
You are NEVER going to exit OR enter perfectly on a consistant basis. I'm not trying to be negative, but it simply is not mathematically feasible. What you really need to do is gather all of your trades up and find the best technique that would work had you applied it to every trade. This is going to be your exit technique. Same for the entry technique really.
When you are dealing with randomness, you must not confuse yourself like this. What you are seeing is the local efficiency point, and this point is most likely a random event. This is because you are dealing with randomness of the # and type of traders in any given market.
Think bigger and see your trading as many different trades all rolled up in one. Keep at it! Don't frustrate yourself needlessly.
Good luck.
StockCoach
That is what I'm looking to eliminate when I enter a trade, the element of "noise" or randomness once the position is taken. I'm not always looking to get the best entry price-wise or catching the low or high, but when I enter I expect a relatively immediate move in my direction, and there are certain triggers that I usually time my trades with to maximize that possibility. In any case, my stops are so tight that typical noise will stop me out 99% of the time -- I'm not looking to just to be right, I need to be right right now. It's beyond this immediate move on my profitable trades that some "noise" may start to come into the market again, but because I am already in a position I don't have the same luxury of being patient and selective in how I exit as I am with an entry. I guess the problem is not so much "accepting" how the market makes a move, but more in accepting that I won't have the same advantages when getting out as getting in.
FWIW, I have gone back and forth between discretionary trading and systematic several times, and believed that one was better than the other depending on whether my systems were getting killed and I had had enough. I now believe that it is possible to trade both ways at the same time and that is my current approach. But most of us are better suited to one way or the other on a given instrument. For example, I love discretion in equities because I believe that tape reading is useful here, but abhor it in SIFs. So during the day my computers are working hard and I am too, while out of the corner of my eye I see what they are doing and what it's positions is/are (I sometimes will even express my opinion out loud at my system on the given trade.) The experience of going back and forth is not wasted though IMO, for each experience strengthens the other.
I found this to be true as well, it's interesting how the advantages of one method only become clear when held against the disadvantages of the other. Although I still trade a few setups completely systematically, I've generally found progress in asking what exactly is the nature of my edge in those "mechanical" setups, and discovering that I could anticipate the setups more advantageously in a discretionary manner -- ie, buying the actual drop on news, rather than waiting for it to return to pre-news levels, etc.
Thanks for the detailed reply btw, and thanks all for helping me get on the right track.
I call nonsense on nononsense.
Dare I say it but all traders and systems manage open positions. In my book that is the primary job of a system or trader once a position is open.
I think that's basically what it boils down to, on the exits I really can't expect to have the same convergence of indications for when to get out in contrast to entry, so I'm reduced to what I consider inferior or less consistent means of determining that point.
I think I can contradict that first statement, and actually go as far as to say that believing in it is the reason why I'm having this issue in the first place. There is an asymmetry that exists between entry and exit in how I trade that I need to accept; otherwise, I'd be able to catch every single intermediate turn of every market, going alternately long and short. But the times when things line up enough for me to get from flat to opening a position are few and far between, and even rarer still for the trade to be profitable enough where I can have this "problem". To expect the same clarity in exit is just asking too much.No 'good' entries can exist without the knowing about 'how' to exit. 'Managing' is only something akin to reading tea leaves.
Don't pity me too badly though, if I could be satisfied just taking 10 ticks in the 10-yr or 50 pips on the euro in a few hours, then I wouldn't be complaining at all. Maybe I'm just too damn greedy?
Agree and good post nitro.
Nitro,
I am not comfortable with the idea that once in a trade - the price action is random, i.e. it will either hit your stop first or get to your profit target (I think this is the gist of what you are saying).
The trades I look for are very specific and I choose these type of trades for a reason - based on my experience, they behave rather similiarily (well bound if you want to call it a continuos function) and give me the expected outcome a certain percentage of the time. The outcome is almost always known by me maybe 5-10minutes after the entry sometimes maybe a little longer. I get a feeling of uncertainty or anxiety and hence I exit. In essence when the price doesn't behave like I would expect I admit I made a poor trade.
The point is, once the price becomes erratic or doesn't give you a clear indication of future behaviour (most likely something you haven't seen before) I would consider the trade too risky to stay with. It is akin to saying "when in doubt get out". I think of it as when, given some time there do not again appear any conditons for entry then there are no conditions to remain in the position.
Mike
I am not comfortable with the idea that once in a trade - the price action is random, i.e. it will either hit your stop first or get to your profit target (I think this is the gist of what you are saying).
The trades I look for are very specific and I choose these type of trades for a reason - based on my experience, they behave rather similiarily (well bound if you want to call it a continuos function) and give me the expected outcome a certain percentage of the time. The outcome is almost always known by me maybe 5-10minutes after the entry sometimes maybe a little longer. I get a feeling of uncertainty or anxiety and hence I exit. In essence when the price doesn't behave like I would expect I admit I made a poor trade.
The point is, once the price becomes erratic or doesn't give you a clear indication of future behaviour (most likely something you haven't seen before) I would consider the trade too risky to stay with. It is akin to saying "when in doubt get out". I think of it as when, given some time there do not again appear any conditons for entry then there are no conditions to remain in the position.
Mike
Quote from nononsense:
murray,
I'm affraid you are giving this poor devil not much help. He wrote in fact:
" I will almost
always exit way too soon [!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!]
or hold way too long. "
To put it bluntly, he may better be helped by frankly hearing that he doesn't know what he is doing.
IMHO, nitro's comments are the more helpful ones. No 'good' entries can exist without the knowing about 'how' to exit. 'Managing' is only something akin to reading tea leaves.
=======
Nononsense;
Its starting to make more sense because illiquid has now admitted publicly his stops are ''99% noise'' unquote.
It makes sense to me since illiquid has been trading 4 years plus;
illiquid now seems to sense it doesnt make much sense,
to keep''99% noise ''stops
Close Cents stops =costly big time.
I think you misunderstood, or I may have been unclear; noise will almost always stop me out of my entries, that is something I fully accept and take into account when deciding upon an entry. If it gets noisy after I enter, I am plain wrong -- it's not the losing trades I'm having trouble with
.