EXITS

  1. I have always said that exits are the hardest part to any trading method. Not just this one but any method. The reason is it is hard to predict the beginning of a trend or the end of a trend. You can see clearly when you are somewhere in the middle.

2. I have two schools of thought that can be used mechanically. One exit is risky and one is less riskier. With risk comes the potential to adjust how much profit you are trying to achieve. I will let the reader decide how much risk/reward they feel they want to manage.

3. When I talk about risk I am referring to how much potential profit one is willing to give back as a trade off for staying in the trade longer.

4. Exit rule #1 (bigger risk)

4a Exit on ANY TF when the lowest and next higher TF both show the opposite color from the original trade. When long you would exit if the lowest TF and next higher TF both are red.

It should go without saying that you reverse whatever I am saying if you take the opposite trade direction.

5. Exit rule #2 (less riskier)

5a Exit on ANY TF when the lowest TF bar changes to an opposite color from the original trade. When long you would exit if the lowest TF bar is red ignoring the upper TF’s.

6. Keep in mind that if you exit on this less riskier method you can always get back in later after the lowest TF bar changes back to the original color based off of the original trade. I say this because you might have exited prematurely to avoid waiting too long for the riskier next higher TF bar to turn red. I will go into another technique that will have it’s own thread. It will be based on what I have touched on here.

7. One of the reasons I have dedicated my time to this thread is for you the reader to help find ways to manage the exits to optimize the ability to keep those hard earned PIPS. I believe we can come up with a filter or something based on resistance or support that can help identify the tops and bottoms more efficiently.

EPILOGUE

 That about sums up the strategy that you can use to make more money then you could have imagined. This can be your personal ATM machine. If you like what you have read I would appreciate any and all feedback good or bad. Stay tuned for my next word doc about a style of trading that let’s you enter at anytime once a trend has already been established.

Steinitz

Taken From : Forex-tsd.com   ( thread resume)