Exit strategies - bobnat
What time scale do you normally use?
Regards
I use multiple frames. I’ll identify a trade on the hourly then enter on either the 15 or 5 min. I stay on the entry frame until it reaches a certain point, then I move up to the hourly and use that for my exit.
So, if I enter on the 5 minute and the first three (or three out of four, three out of five) 5 min bars go against me, then I get out because it tells me that either my analysis or timing was wrong. Once I move up to the hourly, I’m well into B/E territory, or a small profit, so I just set a stop and limit and stop worrying about it.
I use the three bar rule. If my trade goes against me for three periods, I’m out. I take smaller losses this way and it suits me psychologically.
For example, I trade Fibs. I put my stop at a predefined spot. Once I enter, if the trade goes against me for 3 periods, it’s time to get out.
For me the most important part of this is regaining my objectivity. I find it very hard to be so while in a losing trade. Also, it prevents me from seeing better opportunities. There are lots of opportunities to put in trades so why get stuck in a losing position for hours or days on end when it’s clear that you’re losing?
I love the POP (Phantom of the pits) stuff. I have that on my wall, along with Rule 2-Press your winners correctly without exception.
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