What Matters More: Entry or Exit?

[Specterx]

Good entries are everything - 90-95% of effort and research should go towards identifying good entries and how to trade them tactically, in the early stages of the trade.

Exits are entirely downstream from the entry. Having a strategy to let winners run is essential to maximizing your profit factor, but consistently good entries can be made into a profitable system using any remotely coherent exit strategy or combination thereof. Conversely, no exit strategy can turn a losing system into a winning one. My system would be profitable using random exits, so long as my existing risk management was retained in all other respects; I’d be insane to try taking random directional entries across the thousands of available symbols.

It’s true that as time goes on and one’s approach gets more refined, the biggest incremental gains are to be had from improving the exits and thereby capturing a larger total integral of the available MFE, especially from very rare tail events. But that assumes the MFE is there to begin with.

 

[Zwaen]

I would say the definition of trade is defined by both, otherwise it’s investment one never sells /buy hold till you die(HTYD).
So you will never get a satisfactory answer, but I think it was more started as discussion-propelling

Is a good trade a function of the MAE/MFE equation, both combined by their prob. density function?

 

[deaddog]

Not sure which matters more but emotionally buying is easier than selling.
Just ask the you haven't lost until you sell crowd.

 

[tiddlywinks]

Entry or Exit?..... Exit
Target or Stop?... Stop

 

[countryBoy641]

Just look at the best:
Warren Buffet is one of the wealthiest men in the country.
But hardly poor as a kid.
Getting the entry right is important
But getting the sector right is the whole point.
He used to like stable demand, now maybe changed.
Stable demand means KO, Wrigley, I think he was going after Hershey.
Got rebuffed. The public shares are non-voting. Hershey Academy (Class B shares) runs the company.
So he bought M&Ms. Buffet is a monster when he gets going
***
to select an industry, he uses fundies.
He only hires people who read at least one annual report/week.
***
I don't read fundies.
Never a scalper, have tried Day Trader. Not for me.
Then I used to be a Swing Trader.
Now I am an Investor.
For me, TA is everything. It's like "the footprints in the sand"
I use combinations of MAs to select an industry.
MACDs (Moving Average Convergence Divergence developed by Gerald Appel).
That's everything to me.
I just stare at those sometimes for hours
early am is best, no noise, quiet.
(2:00am -4:00am )
I buy the biggest package Stockcharts offers.
more data, some stuff goes back 50 years,
DJIA 100+ years. SPX is a little less, started later.
***
It's in the charts.
Look for the cycles.
Just let it in.

 

[schizo]

What's more important, stops or targets?

Actually, that a very good question. I would think most people will say it's the stops. But I tell it's neither, at least without first considering the background context. Is it a trending market or a rangebound market (or more specifically, are you trading with the trend or are you fading the trend)?

For our noob brethren, let me give you a little hint: the lion's share of the money is made in the middle portion of the trend (ie. the body). It's never at the extremes (head/feet). Stops matter at these extremes, but not so much in the middle, as long as the trend is intact.

 

[schizo]

Historically I've struggled more with exits than entries. Sucks when you buy a stock at $2/shr and close the trade an hour later at $4/shr. You're patting yourself on the back telling yourself what an awesome trader you are only to see the stock close the day at $14/shr. Ooof!

You're just a greedy MOFO

 

[tomkat22]

You're just a greedy MOFO

I think I suffer from Premature Eject-tilation. I heard they have a pill for that but I haven't looked into it.

 

[DallasCowboysFan]

Brainteaser for the weekend.

I used to think nailing the entry was paramount (both price and timing) and everything else was secondary. These days, however, exits play a bigger role.

What say you?

Just making a decision is important.
You will never enter at the lowest low or exit at the high.

 

[schizo]

Just making a decision is important.
You will never enter at the lowest low or exit at the high.

You could enter at these swing low and swing high pivots. It really all comes down to accurate timing. But, in reality, you're more prone to get stopped out because of violent whipsaws. So going back to my earlier comment, it's always more prudent, if not safer, to enter when the trend is already underway, eg. buying the pullback in an uptrend.

Unfortunately, whenever you buy the pullback, it turns out to be a trend reversal.