Exit strategies for 1m trading?

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PeterKalw
143
PeterKalw  

What are the best exit strategies for trading 1m chart? In short - how to not exit if you shouldn't.


The first one that comes to my mind is a return from overbought/oversold territory, but sometimes such return doesn't even mark a retracement and the trend keeps going.

So is there a way to tell the difference between rally-ending return of RSI from overbought/oversold and just typical RSI zig-zagging? Besides, at trend endings RSI often does not reach 30/70.

I was also thinking to get some confirmation from Bollinger Bands (or even better Keltner Channel) - if bar close was not outside bands, then don't treat RSI's trip into overbought as rally-ending.


Any other suggestions? (But not "exit after 6-10 pips to stay safe").

Flavio Jarabeck
4266
Flavio Jarabeck  
PeterKalw:

What are the best exit strategies for trading 1m chart? In short - how to not exit if you shouldn't.


The first one that comes to my mind is a return from overbought/oversold territory, but sometimes such return doesn't even mark a retracement and the trend keeps going.

So is there a way to tell the difference between rally-ending return of RSI from overbought/oversold and just typical RSI zig-zagging? Besides, at trend endings RSI often does not reach 30/70.

I was also thinking to get some confirmation from Bollinger Bands (or even better Keltner Channel) - if bar close was not outside bands, then don't treat RSI's trip into overbought as rally-ending.


Any other suggestions? (But not "exit after 6-10 pips to stay safe").

It depends on the degree of volatility of the Symbol.. That's why it is hard to deal with 1M charts.

The question you have to ask yourself is (in the first place): Why am I using 1min timeframes?

Pezhman Zamani
736
Pezhman Zamani  
The same strategy you enter
PeterKalw
143
PeterKalw  

@Pezhman Zamani I don't think so. I'm trading with the trend and I'd like to jump off, when I suspect the trend will reverse any minute. This suspicion is good to exit the trade, but not good enough to enter the opposite one - it would be against-the-trend or bottom/top-catching, which is deadly as everybody knows. Which is not what I'm trying to achieve.

Keith Watford
Moderator
15796
Keith Watford  
PeterKalw:

Do not double post.

I have deleted your other topic.

Sergey Golubev
Moderator
108452
Sergey Golubev  

The threads on the forum : 

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?

  • Parabolic
  • overbough/oversold levels (stochastic, demark and so on)
  • support/resistance level (povit, fibo and so on)
  • opposite signal to enter
  • openning the other trade on same direction with increased lot size (martingale)
  • openning the other trade on same direction with decreased lot size but with increased take provit value (anti-martingale)


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"



Zee Zhou Ma
1903
Zee Zhou Ma  

Best strategy is enter in the minute when the opportunity is right (timing), and close in the hour when the trend has ended (trend).

The indicator you used on the minute time frame needs to have time period compression and band/channel numbers for the hour for example. 

You would need to do more testing to find out the numbers, which will not be an exact science, but an art.

PeterKalw
143
PeterKalw  
Thanks Sergey.

I'm looking for some indicator or mix of indicators to help me with it. Like I already mentioned, RSI-14 (close) 70/30 are the first thought, but they are not ideal because:

1. sometimes RSI-14 crosses 70/30 and quickly returns and the market just keeps going. So the signal turns out to be false.

2. sometimes market reverses without RSI-14 reaching 70/30 at all! This is especially very common at the ends of trends, when RSI starts to show weakness.


For both of these situations RSI-14 return from 70/30 is just wrong, therefore I'm looking to somehow enhance this information:

ad.1: how to determine that 70/30 cross should be ignored?

ad.2: how to notice that market has reversed without reaching 70/30.

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