Read the trend correctly and the price movement will tell you when to exit. Having a fixed target price is just your idea, and not what the market's actual price movement will be.. And you will too often fail to see, or believe, an exit indication that falls short of your target.
Don't make that an automatic part of your plan. Each reversal indication must be judged, bc a reversal will lead to just a big reaction, a correction, or a new trend.
And, exiting a long position is not an automatic signal to take a short position.
I totally agreed. My exit point is not predetermined. It's determined by market action. But my stop loss is fixed. That's how you control risk. Fixed loss and potentially unbounded profits.
So today I put in stops. It's good and bad. I got stopped out with small losses. Normally I would hold through that and it would eventually go my way(most of the time... The 1 out of 10 that it doesn't go my way I get destroyed. hehe). But I'm already stopped out. So took small losses. Several small losses add up. But I understand that if I didn't put in those stop losses and if things went really wrong I would be down a lot more. I get it.
But I feel like my timing is still slightly off. If I just hone it a bit more then my stops wouldn't get hit right away.
But I made back all of my losses this morning easily because my losses were small and manageable. That's lesson #1.
The second lesson is obvious but should be mentioned. Not all days will be trendy. Today was range bound. So trade accordingly. In then out then reverse. Then in and out. On trend days you can hold for a long time. For example, 12/29/2017, I put on a NQ short trade near the open and held all day til the close. Not all days will be like that. So gotta be flexible and constantly monitoring price actions to see which kinds of days it is and trade accordingly.
Lesson #3, even though the entry pattern might show a particular bias it pays to wait a little before entering to see how it unfolds. I was about to enter a position then I paused just for a second. Then I see it evolving. And it was not the original pattern I thought. So I saved myself. Even if I had put stops in, sure it will have cut losses. Why cut losses when you can avoid it all together?!
The next level of improvement would be once I see that it's not the original pattern(long or short) then I should go the other way. So for example I thought it was a short pattern, pause to see(seconds), then when it showed to be a long pattern, jump in and go long. Saving money by not entering the wrong trade is good, but what is better is entering in the right trade and making money.
All these lessons take time to be integrated into my thinking and habits. Everything takes time. Losses are getting smaller. And when I lose I'm able to make it back to positive or flat. It's a long journey. No rush. Tweaking and refining these things will help me in the long run. No need to trade size now when I haven't fixed all of my errors, biases, thinking, and acting.
