Suggestion Exit strategy when losing trades

[Lewinsky]

A common trait of the so-called forex teachers out there is that they always only teach entry part of the strategy.

How do you exit the losing trades?

The exit strategy is often left out and ignored when questioned. They always tell you to keep following money management but never tell or possibly they themselves do not know how and they dont care since their deposit money is gained from teaching. Margin call? Meh. Just deposit again, right? Just advert more forex classes to gain more students. Yeah advertising using the screenshots of winning trades (Only).

Money management? Cut your losses? Cutting losses will catch up with u in long term. Evening out the profits and losses. Use a good risk:reward ratio? Also a no go. Too high, stop losses will be hunted after diving far in profits. Too low, the profit is not going to cover the loss.

Since there is possibly no perfect entry in this game, exit strategy of negative trades should have the same level of importance of entry if not more.

So, if anyone is gracious enough pls share your good exit strategy here. Thank you.

Msg: i dont intend to bash anyone who's teaching out there. Just ranting a bit after countless of paid forex classes. Just ignore the rants and focus on sharing the exit strategy.

 

[Lewinsky]

Make a plan and hit the close button when your plan does not come out.

If the plan comes out and it turns out to be losing? What do you do then? Whats your exit strategy?

 

[ganstgi]

If the plan comes out and it turns out to be losing? What do you do then? Whats your exit strategy?

Based on good indicators won't give bad signal 5 in a rows, I use two steps handling bad trades.
1. Open Average position on Daily Range, "get out" when hit Break Even level.
2. When the Average position FAIL, use allowed part of Margin as last defense (I use 20% of Margin reserve).
When it hit my 20% margin limit..... Cut Loss.
Forget the bad trade and look for new trade chance.

Good luck !

 

[Lewinsky]

Based on good indicators won't give bad signal 5 in a rows, I use two steps handling bad trades.
1. Open Average position on Daily Range, "get out" when hit Break Even level.
2. When the Average position FAIL, use allowed part of Margin as last defense (I use 20% of Margin reserve).
When it hit my 20% margin limit..... Cut Loss.
Forget the bad trade and look for new trade chance.

Good luck !

This is the type of reply we are looking for guys! Thank you for sharing. We need more like this

 

[lia786]

Actually our exit strategy leads us to failure, we are quick to close profitable trades and allow run the loosing trades.

 

[ganstgi]

i use macd crossovers when confirming entries on big time, but i filter the crossovers entries using macd histogram. That way it will filter quiet market, so that u dont enter on fake out . and once there is DD, enter another trade and close it at the entry of the 1st trade.

Since most indicators (except Pattern indicators) are derivative indicator from Moving Average, (include the one you use MACD), they all carry biggest Moving Average problem which is Lagging.
For those reason, using Indicator as Exit strategy/signals would give double problem.
(as we already accept the Lagging problem as Entry signal, we use it again to exit trades)

And if we use Money Management in our trade, it's all about Quantitative approach.
Money Management never involve Indicators consideration.

Best regards,
GIS

 

[ganstgi]

Actually our exit strategy leads us to failure, we are quick to close profitable trades and allow run the loosing trades.

This is why I use Quantitative approach , rather than Indicators as Exit strategy.
Using indicator as Entry signal is okay, but as Exit signals Indicators lead us to exit too soon or too late.

 

[ganstgi]

When i say macd crossover, its not just a macd croosover mr quantitative approach. You use the macd histogram wrongly, All the Quantitative approach in here is understanding macd histogram values and how they are related to that macd crossover at the time of trigger.

Yeah, maybe It's because don't know how to use MACD.
Any Exit strategy can be good depend how well we understand how it work.
Happy trading !

 

[Lewinsky]

i use macd crossovers when confirming entries on big time, but i filter the crossovers entries using macd histogram. That way it will filter quiet market, so that u dont enter on fake out . and once there is DD, enter another trade and close it at the entry of the 1st trade.

That's a good idea right there. Averaging the take profit price when there is drawdown. Thanks for sharing!

 

[Lewinsky]

Actually our exit strategy leads us to failure, we are quick to close profitable trades and allow run the loosing trades.

That is true to some extent lia786. Depending on the market's movement sometimes letting the profit run can be very profitable. A very strong and persistent momentum is needed when applying this strategy. Which often only come several times a month.

 

[blackking]

Sometime I am using a

That's a good idea right there. Averaging the take profit price when there is drawdown. Thanks for sharing!

Sometime I am use averaging strategy to manage the risk, but we need to look major trend at least on weekly
will harmful account if use averaging and against major trend

 

[ganstgi]

Money Management made for consistency.
There's no consistency on Over bought, Over sold, divergence, bull cross & bear cross.

 

[Lewinsky]

Sometime I am using a

Sometime I am use averaging strategy to manage the risk, but we need to look major trend at least on weekly
will harmful account if use averaging and against major trend

Yes it is better to roll with the major trend. But what if trade is already taken and it is against major trend any idea on how you would counter that? Or you just cut loss?

 

[Lewinsky]

This is good. Everyone here is contributing and sharing.

While the main focus is on exit strategy, everyone is also graciously giving tips on other matters!

Keep it going guys!

 

[Lewinsky]

we are saying same thing in different methods, you are rite and macd histogram does that too

Yes. Ive read enough and tried enough methods. Each and every method has its pros and cons. Even have its time limit.

Winning percentage varies as the market is constantly evolving not tied with just one method.

Im at a point of wondering if the real key is a good exit strategy even with medium winning percentage trade entry.