Help with exit points for swing trading (pic)

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IronFist

Hi, I'm a noob to trading. I've seen a lot of talk of entry and exit points, but I feel like sometimes people are arbitrarily picking their exit points just to make the reward/risk profile look good.

Take the chart I've attached for Inco Ltd (symbol: N). I entered @ $42.23 as the MACD was positive, the green DMI line had just crossed the red line and was going up, Parabolic SAR was showing buy signals, and the price had just crossed the mid-point of the price channels and appeared to be rallying.

Where is the proper exit point for this trade? I was thinking around $46, for a 10% gain, but I'm not exactly sure why I was thinking that.

As soon as I bought I saw "3 advancing soldiers" so I thought "cool, I was right." I'm new to this, remember. Then a doji, then it came back down and bounced off the 50 day MA, then another little rally and pullback and bounce off the 50 day MA, then a 3rd climb and bounce off the MA, then yesterday a 3% gain, and then today it's back down a percent so far (the rightmost candlestick on this chart). I'd like to say it will keep going up (maybe a few more bounces off the MA) and I can sell at as it touches the upper price channel, but I'm not sure...

How do I go about finding the correct exit point here?

Thanks.
 

Attachments

Who said there's a correct exit point?
If there was such a thing, trading wouldn't exist.


Quote from IronFist:

How do I go about finding the correct exit point here?

Thanks.
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Quote from IronFist:

Why didn't that work for me? I put the pic address inside of [img] [/img] tags. Oh well. ::shrug::

Thanks.
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Click the attached image, then highglight the URL.

Instead of the
tags use
< img src= url goes here >
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But remove the spaces after the <, = and > symbols. For additional detail click the quote icon underneath my inline image.

- Spydertrader
 
Quote from risktaker:

Who said there's a correct exit point?
If there was such a thing, trading wouldn't exist.
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Ok. A "decent" or "good" exit point.
 
Quote from IronFist:

Ok. A "decent" or "good" exit point.
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That all depends on YOUR expectations, strategy, needs, psychology, experience, capital, etc. etc. etc.

Nobody can answer that question for you.

Just keep in mind that the objective is not to call tops and bottoms, but to take a reasonable profit out of the trade and move on.
 
You are trying to predict what the stock will do. Charts can't tell you that. In fact no one and nothing can tell you what a stock will do.

All you can do is try to put the odds slightly in your favor and over many many trades let the numbers work themselves out. If you feel as though you are guessing at this point then you have no way of putting the odds in your favor and should be paper trading until you have a clearly defined system.

One common trait among successful traders is the firm, unwavering belief that they absolutely, positively do not know what will happen next in the market. If you truly believe there is no way to know, that each trade taken alone is a random event, then you are never 'wrong' on a trade if you followed your plan. If you take a loss it's only one of many data points along the way and is just a statistic tracking your system's progress. Makes taking those losses a lot easier.
 
Quote from lescor:


One common trait among successful traders is the firm, unwavering belief that they absolutely, positively do not know what will happen next in the market. If you truly believe there is no way to know, that each trade taken alone is a random event, then you are never 'wrong' on a trade if you followed your plan. If you take a loss it's only one of many data points along the way and is just a statistic tracking your system's progress. Makes taking those losses a lot easier.
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Very, very well put. There are very few traders who can consistently call entries and exits based on their instincts.

Trading for the rest of us requires relying on statistical probabilities developed from the base of a logical strategy.
 
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