I find it interesting that none of the posts in this thread have mentioned anything about trade management.
I've finally come to the understanding that in trading, you never really know what's going to happen next. In fact, that was the whole premise of Trading In The Zone, by Mark Douglas.
There are really only two ways you can exit a position from a trade management perspective: exit all of your position at once, or scale out in increments.
If you exit it all at once, all of your eggs are in one basket, so to speak, and your chances of being disappointed are going to be very high unless you learn to be satisfied with leaving some money on the table (which I've heard is a very common complaint among a lot of successful traders). IMO, all-in/all-out trading is very difficult and frustrating.
The other option is to exit in increments. I like to look for key resistance levels in an uptrend (or support in downtrend) within the time frame I'm trading to exit part of my position. This also gives you some indication of the risk:reward ratio of the trade (i.e. if a key sup/res level is too close, you may not want to enter the trade since there is a good chance it will test that level then reverse). The remaining portions of your position can then be managed with trailing stops. For example: take profits on 1/3 of the position at the key support/resistance, trail a stop to protect half your profit on another 1/3, and leave a stop behind corrections, a moving average, etc. on the last 1/3. Of course there are many combinations of how to do this, but the idea is that you aren't dependent on a single decision for your exit, which increases the possibility of catching a good move if one occurs, and at least taking some profits if a long-term trend never materializes.
Additionally, if a market is trending, then goes into a range, that is a signal that something has changed. Use that as an opportunity to move your stop to just beneath the range (for longs). If you want, you can enter a limit order to exit near the high of the range to try and maximize your profits, or use the trailing stop order only, in hopes that the market will break out to the upside and continue in the direction of the trend.
It seems like many of the posts in this thread are just another version of searching for the holy grail, except it's with exits instead of entries. You'll only get frustrated searching for the grail. Someone once told me that trading isn't a science, it's a sloppy art form. Learning to accept that is at least half the battle.
