I feel the entry is also critical

[Trend Fader]

Surfer...

My point about the bars... is that the broader time frame the greater the amount of bars per a trend...

Do this analysis with daily charts, weekly charts, 5 min charts, 1 min charts.... whatever

The daily charts have long trends... weekly charts have longer trends per a bar....

The further you go ... the clearer the trends get...

yet the further you go .. the greater the trends last..

make sense?

--MIKE

 

[dbphoenix]

Quote from Trend Fader:

I swing trade and I am consistently profitable....

Therefore I believe my words have more merit as to someone that is unprofitable.. not that you are unprofitable...

I just want to make sure that I am having a discussion with a real trader.. not a wanna be...

understand?

I've been trading since 1989, Fader. Whether you believe that or not isn't going to affect my day.

Whether you or I or anyone else is successful or a failure has nothing to do with the subject of the thread, which is whether or not entries are as important as exits. Whatever success you may have enjoyed need not have anything to do with what you believe. See Taleb.

--Db

 

[trader99]

Having done both position trading and daytrading, I think the key to this debate lies in your holding period or time horizon. The shorter your time horizon, the more important your entry is. For daytraders or scalpers I would say 90% (or more!) of their "edge" lies in the entry. For microscalpers, if they miss their entry by 30 seconds or less than then they will get worst fills and lose their edge.

For position traders, they will say "Hey, the trend is up. I'll go long. Set a stop loss at x%" So, the entry isn't as important. The gryations is just noise. And they sit back and wait to see what happens.

For scalpers or daytraders, they can still be wrong even if their entry is "correct", because entering a little too late can make you be caught in the temporary top/bottom. And then they get stopped out or just scratch the trade. So, the entry is of paramount importance because they need to see instant results.

I think BOTH entry and exit are important. But it becomes way more important the shorter your time horizon is.

just my .02 cent

trader99

 

[Trend Fader]

Quote from trader99:

Having done both position trading and daytrading, I think the key to this debate lies in your holding period or time horizon. The shorter your time horizon, the more important your entry is. For daytraders or scalpers I would say 90% (or more!) of their "edge" lies in the entry. For microscalpers, if they miss their entry by 30 seconds or less than then they will get worst fills and lose their edge.

For position traders, they will say "Hey, the trend is up. I'll go long. Set a stop loss at x%" So, the entry isn't as important. The gryations is just noise. And they sit back and wait to see what happens.

For scalpers or daytraders, they can still be wrong even if their entry is "correct", because entering a little too late can make you be caught in the temporary top/bottom. And then they get stopped out or just scratch the trade. So, the entry is of paramount importance because they need to see instant results.

I think BOTH entry and exit are important. But it becomes way more important the shorter your time horizon is.

just my .02 cent

trader99

Good points... Do you think the fact that entry is more important in day trading than position... a negative feature of daytrading?

--MIKE

 

[0008]

I think trader99 is right.

I am a very short-term daytrader, usually hold a position for minutes. This is one reason why the entry is so important for me. For Buffett or other long term investors, they don't need to worry too much about it.

 

[dbphoenix]

Quote from 0008:

I think trader99 is right.

I am a very short-term daytrader, usually hold a position for minutes. This is one reason why the entry is so important for me. For Buffett or other long term investors, they don't need to worry too much about it.

Buffett is not necessarily pertinent. He couldn't care less about technicals, and once you introduce fundamentals into the mix, you're venturying off into an entirely different topic altogether. If one has persuaded himself that his fundamental analysis is sound, then he is more likely to simply enter at what seems to him to be a propitious price and not care about wobbles along the way.

But entries and exits and stops and all the rest of it needn't have all that much to do with bar interval. A reaction high is a reaction high, whether you're using a 5m chart or a weekly chart. A trendline is a trendline. The only difference is scale.

--Db

 

[trader99]

Quote from Trend Fader:





Good points... Do you think the fact that entry is more important in day trading than position... a negative feature of daytrading?

--MIKE

Mike,

yes! I'm sure there are some people on this board who can make a "decent" living daytrading and perhaps some even do well. But from my personal observations with daytraders and having done it, I would say it's very very difficult game. For example,a lot of times, I'm right about the direction on just pure intraday moves here(i'm not talking about position trading just intraday trends) and I still get stopped out or get scared out of position because of the intraday noise or what some people here called "specialist game" or whatever.

What's the point of getting in, stopped out, scratch, getting in, small profit. scratch, getting back in, finally the rally comes or the fall comes(if you are short). I've looked over many of my daytrades and analyzed them. It would have been better if I just held through the noise because 1) it reduces transaction cost 2) I would have stayed in the trend longer instead of having a scalper mentality 3) I would have bigger winners.

of course, there are scalpers here that do very well. But I like them to do this particular statistics. Take their daily commission divided by their daily gross profit = Commissions/Gross Profit. In daytrading I would say more than 60% and in some people's case 90% of their total profit is eaten up by commission. No wonder people want 1/10th of 1 penny cost.

So, to do really well, you either have to have perfect timing in entry(next to impossible) and almost zero cost. Notice, I didn't say nice exits. Because daytraders exits are so micro in scale that perhaps it doesn't even matter. I know this from seeing how others trade and having fallen into that mentality.

But taking intraday trend moves can still be a PROFITABLE enterprise, but daytraders with short term horizon miss the big picture. Tell me how many daytraders you know hold through an entire day of good trend. Those that do are the ones that are going to make real money or they are actually swing or position traders doing the occasional daytrades. So, daytraders get in, nice profit, get out. Get back in , nice profit, get out. That's on a good trend day. On a trendless or noisy day, it's just in, out, in, out, scratch, small losses,small losses, scratch, small profit, big losses! Oops! Minus the accumulated commissions and you just wiped a few days of small gains. doh!

just my .02

trader99

 

[dbphoenix]

Quote from trader99:



But taking intraday trend moves can still be a PROFITABLE enterprise, but daytraders with short term horizon miss the big picture. Tell me how many daytraders you know hold through an entire day of good trend. Those that do are the ones that are going to make real money or they are actually swing or position traders doing the occasional daytrades. So, daytraders get in, nice profit, get out. Get back in , nice profit, get out. That's on a good trend day. On a trendless or noisy day, it's just in, out, in, out, scratch, small losses,small losses, scratch, small profit, big losses! Oops! Minus the accumulated commissions and you just wiped a few days of small gains.

Not only are you equating daytrading with scalping but you are using rookie behavior to characterize all daytrading behavior.

A daytrader who is in and out, in and out doesn't know how to define trend or trendlessness. Therefore, he winds up in chop. Experienced daytraders don't fall for this.

As for getting in, taking a profit, getting back in, taking another profit, this is just another form of scalping. As long as the trend is in one's favor, there's no need to exit the trade. The problem is not timeframe but the ability to recognize a trend.

--Db

 

[trader99]

Quote from dbphoenix:



Not only are you equating daytrading with scalping but you are using rookie behavior to characterize all daytrading behavior.

A daytrader who is in and out, in and out doesn't know how to define trend or trendlessness. Therefore, he winds up in chop. Experienced daytraders don't fall for this.

As for getting in, taking a profit, getting back in, taking another profit, this is just another form of scalping. As long as the trend is in one's favor, there's no need to exit the trade. The problem is not timeframe but the ability to recognize a trend.

--Db

db,

I'm NOT equating anything. If you read carefully, I wrote,

"yes! I'm sure there are some people on this board who can make a "decent" living daytrading and perhaps some even do well. But from my personal observations with daytraders and having done it, I would say it's very very difficult game. For example,a lot of times, I'm right about the direction on just pure intraday moves here(i'm not talking about position trading just intraday trends) and I still get stopped out or get scared out of position because of the intraday noise or what some people here called "specialist game" or whatever."

Db, perhaps you are the minority of the people making a decent living daytrading. I didn't say it's not possible. I just say it was difficult,etc. blah. But definitely possible, but one has to be smart about it. Perhaps, you are one of the better ones. I'm just saying on average that's the behaviour I see. And it has to do with psychology of short time frame.

But we are digressing here. The main point of this thread was to see if entry vs exits. And I already pretty much answered that question.

However, theorectically, one SHOULD NOT think differently when you are trading short term vs long term. You should have predefined entry, exits, trail stop, profit target,etc. Just a different time scale. The problem is that after trading in the short time horizon for a while people tend to revert to seeing trees instead of the forest. Maybe it's just me or short term traders I've been around with. But I think that's a pretty good picture fitting the statistics of failure/success rates. But if one is able to capture those longer intraday trends then more power to you.

good luck!

trader99

 

[Jayford]

Quote from trader99:





of course, there are scalpers here that do very well. But I like them to do this particular statistics. Take their daily commission divided by their daily gross profit = Commissions/Gross Profit. In daytrading I would say more than 60% and in some people's case 90% of their total profit is eaten up by commission.
trader99

Yep, some day traders do trade this way (not me), but the percentage net profit to commission is irrelevant if you come away with a good income every day. I used to work with a guy who made something like 100 trades per day, and made a grand or so net pretty much every day. I have no idea what his commissions were, but pretty damn high. So what. I wish I could take home a grand a day. BTW, I make, on average, a half dozen trades per day. That would put my total commission at less than 30 bucks per day, per contract. This is very minimal, and I am still a pure day trader. I don't scalp because I'm lousy at it.

Jay