Which is more important in Index Futures? Entry or Exit?

Excellent responses by all.

The reason I think entries are more important is my need to guard my money. I like to take "lower risk" entries that give almost immediate feedback as to whether the trade will produce a positive return. First and foremost, I want to protect my money with my entry and stop.

There were many valid points about exits being more important but I'm not willing to withstand the drawdown of a poorly timed entry. At the same time, missing an exit point can be just as bad as a poorly timed entry. Watching a trade reverse and come running back towards your entry may cost you more in unrealized gains than all your stop-outs combined.

MiniDowTrader
 
Quote from nazzdack:

Exits are always more important. They determine your end result.
More...

wrong
exits are only important if you make a good entry.


If you make a bad entry, you are in the hole from day 1.

If you make a good entry, then you make a good exti, then you make money.

If you make a good entry, then you make a bad exit, you don't lose much but you don't make much either.

If you make a bad entry, and you also make a bad exit, you = investor on march 2000 with your life savings in the market.

========================

Equate tradnig to buying and selling used cards (real life trading)

If you buy a 1970 pinto for $25,000 ,
it doesn't matter who you sell (exit) this pinto to, 99% of the time you are out $25k.

If you buy a 1970 pinto for $25 , You can sell this to a chop shop and make money.

You can sell your pinto to a chop shop for $50 and make $25
Or you can sell your pinto to an antiques dealer for $1k and make $950

The "Selling" equation come into play only as your method of maximizing gains / minimizing inventory (aka risk)

Your end result is already deteremined the moment you bought in.

=================


Simple.
 
In my case, entry and exit are the same thing. Therefore, neither is more important than the other.

I'm a daytrader who always maintains a presence in the market. My concern is not the entry or exit level, rather, the reversal areas.......
 
COOLWEB------Nobody cares about your 1970 Pinto. Where are the 2006 Mustangs that are trading for $50 or $50,000 RIGHT NOW!?!? When you can answer that with smug certainty, please let us all know.
 
I would have to say exits. Any fool can enter a trade, but 95% lack the skills to exit with a small loss and admit they were wrong.
 
It probably really depends on time frame. Scalpers absolutely live and die by correct entry point.

If you're swing trading months at a time, you can deal with a position going against you for a little bit.
 
I would have to say the most important part of trading Index futures are your stops.

Finding the balance of what is tight enough to protect capital, and loose enough to let profits go and trades to get good.

I personally failed at attempting that, futures just were not for me.

My entries were okay a lot of the times, especially later on when I started understanding more, but stops just repeatedly got taken out. Maybe I should have traded the ES....
 
If you enter randomly and exit randomly, in long run you should break even, if you survive drawdowns by properly sizing your trades, and ignoring slippage and commissions.

To be profitable you can start from here. Sizing is the most important to keep you trading. Entries or exits will help or hurt you in the same degree. Slippage (liquidity) and commissions bleed your account drop by drop, and you should minimize them.

Also, I think there's a lot of value in the concept of "exit as an entry in the opposite direction". It requires more skill and discipline, but it seems so elegant.
 
You must log in or register to reply here.
Back
Top