Which strategy is best to close the position? - page 4
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Which strategy is best to close profitable positions ?
if not bar -by-bar or MMA8
different strategy uses exits
trending strategy can use trailing
scalping / ranging can use hard take profit
if you use trailing in ranging strategy, you find your trades always at breakeven.
Thanks For Replay
Strategies for getting more profit from each trade .
Example : trailing , break even , Parabolic SAR ,.....
Forum on trading, automated trading systems and testing trading strategies
Which strategy is best to close the position?
Sergey Golubev, 2013.05.29 08:03
If you have a strategy so exit should be part of it. Strategy without exit is not a strategy.
What the people are using for exit?
I think - closing on overbough/oversold (stochastic etc), support/resistance (povit/fibo) and simple trailing stop are most popular for the people who consider about "let the profit run"
The answer to this topic can be subjective because traders has different strategies and we cannot apply every exit strategy in one strategy, the best that a trader can do is to find a strategy that maximize the gains while protecting also your existing profits. There must be a balance approach when to exit or close a trade.
Forum on trading, automated trading systems and testing trading strategies
Press review
Sergey Golubev, 2014.05.23 17:02
Should You Exit Your FX Trade On Strength Or Weakness? (based on dailyfx article)
“You can’t control what the market does, but you can control your reaction to the market. I examine what I do all the time. That’s what trading is all about.”
-Steve Cohen, Hedge Fund Manager
In my experience, the more years a trader has under their belt, the more attention they pay to the exit on their trade. It’s not that the entry isn’t important, it’s just that there’s a direct profit impact based on your exit. This article will breakdown two methodologies for exiting your forex trades so that you can choose the one that aligns best with your personality & goals.
Why Traders Neglect the Exit
As a trader, it’s easy to focus on entering the trade. After all, you’ve got to be in it to when it and the only way to be in it is to find an entry. And when it comes to entering into a trade, your mind is likely to race to different outcomes about whether or not this trade will be a home-run that “can’t fail” or whether you’re not 100% sure on the trade and therefore, should either hold-off or enter with a smaller trade size. For what it’s worth, regardless of your analysis, the second attitude used as an example is the healthier approach
However, it’s probably best to take the pressure of yourself regarding the entry. Why? Because, you likely will get at best a decent entry unless you’re counter-trend trading. It’s an irony or paradox of trading that most new traders fret about the entries but where they decide to exit is the most crucial point.
Two Exit Approaches
This part is simple. As far as I’m concerned, there are only two ways that you can decide to exit a trade (well, three if not having a plan is a way to exit). The first method benefits short term traders and that is exiting on strength in the direction of your entry. Therefore, if you’re buying, you can look for clear resistance points or other methods to exit when others are jumping in. The drawback to this methodology is that you could be exiting as the move is just getting started.
The second method is to the benefit of swing style or longer term traders. The preferred exit methodology for longer-term traders is to exit on weakness or a correction in the trend that you’re entering. Exiting on weakness has two distinct drawbacks and that is you either get taken out on a wick low before the trend resumes and / or, you find yourselves leaving a large portion of your paper profits on the table.
Specific Tools for Both Exit Strategies
We just discussed that you can either decide to exit your trades on strength or weakness. To exit on strength, here are a few methodologies you can use that I’ve found favorable over the years:
My preferred methodology is Pivot targets. In a normal uptrend, I’ll look to exit at the weekly R1 level and in a strong uptrend, my preferred exit is the R2 (reversed for downtrends with S1 & S2). The other two methods have been used successfully by many traders.
Emotionally, I believe it’s harder for new traders to exit on weakness. The reason is that it’s easy to beat yourself up for letting so much of your paper profits go away. In order to be comfortable exiting on strength, it’s best to not look at the chart after you exit for a few hours because you don’t want to beat yourself for taking money out of the market. That’s what we’re doing here in the first place!
Count Back Lines - indicator for MetaTrader 5
APPLYING THE COUNT BACK LINE ENTRY By Daryl Guppy
The count back line is used to select the better entry points once we have received trend change signals from other sources. It is a tool that is used within the context of a previous selection. The count back line is used to create a short term hurdle which must be overcome before we can have any confidence of a likelihood of a trend change. It consists of four applications.
Forum on trading, automated trading systems and testing trading strategies
Something Interesting
Sergey Golubev, 2018.08.07 07:12
Very interesting indicator was uploaded to CodeBase - it may be good indicator for exit (for stop loss moved by the trailing stop)
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ATR Trend Envelopes - indicator for MetaTrader 5
The reason why the ATR is used is the following - the % change works OK for middle term timeframes. But for short timeframes and long timeframes it tends to be either too slow or too fast. Here is a comparison of this indicator (upper) and the "classical" version (lower) on daily timeframe. It is obvious that the difference is big and that the "trend" should be redefined in the "classical" calculation.