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A beginner TRADER's biggest dilemma is when to exit a trade whether trade is profitable/loss-making one.I did a small study on this.Found different ways to exit.Putting it in the below thread
@nishkumar1977 @rohanshah619 @harrie007 @DRuzbeh @Puretechnicals9
@nishkumar1977 @rohanshah619 @harrie007 @DRuzbeh @Puretechnicals9
TRAILING STOPLOSS(SINGLE MOVING AVERAGE)
In this kind of exit we take a single moving average like 20 MA/EMA,50 MA/DMA. We wait till the price cuts the moving average decisive
In this kind of exit we take a single moving average like 20 MA/EMA,50 MA/DMA. We wait till the price cuts the moving average decisive
TRAILING STOPLOSS(FIXED %)
This exit is based on predefined percentage for example 5% is our SL
We buy a stock at 100.
5% SL.
So initial SL is 95.
Price moves to 105,SL is moved to 100
Price moves to 110,SL is moved to 105.
This exit is based on predefined percentage for example 5% is our SL
We buy a stock at 100.
5% SL.
So initial SL is 95.
Price moves to 105,SL is moved to 100
Price moves to 110,SL is moved to 105.
TRAILING STOPLOSS(LAST SWING LOW METHOD )
In this kind of EXIT we identify last SWING LOW and put the SL below it.If TREND is strong last swing low is not breached and it goes on to make a new higher low and SL is shifted below new SWING LOW
Chart of TINPLATE is a good example
In this kind of EXIT we identify last SWING LOW and put the SL below it.If TREND is strong last swing low is not breached and it goes on to make a new higher low and SL is shifted below new SWING LOW
Chart of TINPLATE is a good example
EXIT/ENTRY based on MOVING AVERAGE CROSSOVER.
We can enter/exit a trade when a two or more moving average crossover.Example crossover of 20 EMA and 60 DMA on the downside as EXIT & vice versa al ENTRY
We can enter/exit a trade when a two or more moving average crossover.Example crossover of 20 EMA and 60 DMA on the downside as EXIT & vice versa al ENTRY
ATR based EXIT
ATR adjust to price VOLATILITY of a trading instrument.
STOPLOSS & EXIT are taken as MULTIPLE(1,2,3) of ATR
ATR cannot be summed in a single tweet so attaching
two links below
https://tickertape.tdameritrade.com/trading/average-true-range-atr-indicator-strategy-15042 https://www.stockmaniacs.net/atr-trailing-stops/
ATR adjust to price VOLATILITY of a trading instrument.
STOPLOSS & EXIT are taken as MULTIPLE(1,2,3) of ATR
ATR cannot be summed in a single tweet so attaching
two links below
https://tickertape.tdameritrade.com/trading/average-true-range-atr-indicator-strategy-15042 https://www.stockmaniacs.net/atr-trailing-stops/
EXITING PARABOLIC MOVES
Parabolic moves are never sustainable and reverse anytime. If catch the right trend of a parabolic move we want to squeeze maximum profit out of the move without giving away any gains.
There are two ways to exit
1)Keeping last candle low as SL
Parabolic moves are never sustainable and reverse anytime. If catch the right trend of a parabolic move we want to squeeze maximum profit out of the move without giving away any gains.
There are two ways to exit
1)Keeping last candle low as SL
2) Keeping last candle with greater than 5% move as SL
EXIT based on FIBONACCI LEVELS.
STOPLOSS and TARGET can be derived from FIBONACCI EXTENSION and FIBONACCI RETRACEMENT levels.Its a vast topic cannot be summed up here.Attaching a link to a website where it is explained in depth https://tradingstrategyguides.com/10-things-you-need-to-know-about-fibonacci/
STOPLOSS and TARGET can be derived from FIBONACCI EXTENSION and FIBONACCI RETRACEMENT levels.Its a vast topic cannot be summed up here.Attaching a link to a website where it is explained in depth https://tradingstrategyguides.com/10-things-you-need-to-know-about-fibonacci/
KELTNER CHANNEL as ENTRY/EXIT
Keltner Channels is an envelope based indicator that traders can use to understand the current trend
Keltner Channels are a combination of two indicators:
(EMA) &(ATR)
Attaching link to source for better understanding
https://blog.market-pulse.in/keltner-channels/
Keltner Channels is an envelope based indicator that traders can use to understand the current trend
Keltner Channels are a combination of two indicators:
(EMA) &(ATR)
Attaching link to source for better understanding
https://blog.market-pulse.in/keltner-channels/
PARABOLIC SAR to ENTER/EXIT
The parabolic SAR attempts to give traders an edge by highlighting the direction an asset is moving, as well as providing entry and exit points.Attaching links to sources for better understanding
https://www.investopedia.com/trading/introduction-to-parabolic-sar/#:~:text=The%20parabolic%20SAR%20is%20also,indicator%20after%20every%20price%20bar.
The parabolic SAR attempts to give traders an edge by highlighting the direction an asset is moving, as well as providing entry and exit points.Attaching links to sources for better understanding
https://www.investopedia.com/trading/introduction-to-parabolic-sar/#:~:text=The%20parabolic%20SAR%20is%20also,indicator%20after%20every%20price%20bar.
TRENDLINE EXIT
This is one of the most followed way to exit a trade.Price breaking a predefined TRENDLINE is clear indication of change of trend.For confirmation break of TRENDLINE should be followed by VOLUMES and after the complete close of the candle below the TRENDLINE
This is one of the most followed way to exit a trade.Price breaking a predefined TRENDLINE is clear indication of change of trend.For confirmation break of TRENDLINE should be followed by VOLUMES and after the complete close of the candle below the TRENDLINE
SUDDEN NEWS or EVENTS
In case of sudden news that you may judge is going to impact a stock price like news of fraud, an allegation of wrongdoing against management.For safety if we are aware of a event before hand like quarterly results or court hearing we can exit or the trade.
In case of sudden news that you may judge is going to impact a stock price like news of fraud, an allegation of wrongdoing against management.For safety if we are aware of a event before hand like quarterly results or court hearing we can exit or the trade.
SIDEWAYS MOVEMENT/STAGNANT PRICE
Another important reason to exit a trade can be sideways movement of a stock or stocking moving within a range. As a trader we lose opportunity if stock does not move for a period.The capital can be deployed else where.
Another important reason to exit a trade can be sideways movement of a stock or stocking moving within a range. As a trader we lose opportunity if stock does not move for a period.The capital can be deployed else where.
REVERSAL PATTERN
If there is a reversal pattern forming that is against our TRADE trend.We will have to predefined the REVERSAL PATTERN before hand like ENGULFING PATTERNS,HARAMI PATTERNS,STAR PATTERNS. there are more patterns you may deep dive into it.
If there is a reversal pattern forming that is against our TRADE trend.We will have to predefined the REVERSAL PATTERN before hand like ENGULFING PATTERNS,HARAMI PATTERNS,STAR PATTERNS. there are more patterns you may deep dive into it.
TIME BASED STOPLOSS
This kind of SL is used mainly when price is neither moving towards TARGET nor STOPLOSS. So we predefine a time period and exit the trade.Some senior traders start tightening their SL with passing of time and squeeze themselves out of the trade
This kind of SL is used mainly when price is neither moving towards TARGET nor STOPLOSS. So we predefine a time period and exit the trade.Some senior traders start tightening their SL with passing of time and squeeze themselves out of the trade
USING SUPPORT and RESISTANCE to ENTER/EXIT]
Support can be used as point to ENTER a TRADE and SL can be put below the support zone as an exit. Resistanc e zone can be used to EXIT a trade as well as ENTER a short TRADE
with SL above the resistance zone
![USING SUPPORT and RESISTANCE to ENTER/EXIT]Support can be used as point to ENTER a TRADE and SL can be put below the support zone as an exit. Resistanc e zone can be used to EXIT a trade as well as ENTER a short TRADEwith SL above the resistance zone](https://pbs.twimg.com/media/EfxpAvTU0AAAGj4.png "USING SUPPORT and RESISTANCE to ENTER/EXIT]Support can be used as point to ENTER a TRADE and SL can be put below the support zone as an exit. Resistanc e zone can be used to EXIT a trade as well as ENTER a short TRADEwith SL above the resistance zone")
![USING SUPPORT and RESISTANCE to ENTER/EXIT]Support can be used as point to ENTER a TRADE and SL can be put below the support zone as an exit. Resistanc e zone can be used to EXIT a trade as well as ENTER a short TRADEwith SL above the resistance zone](https://pbs.twimg.com/media/EfxpD15UYAA3CdC.png "USING SUPPORT and RESISTANCE to ENTER/EXIT]Support can be used as point to ENTER a TRADE and SL can be put below the support zone as an exit. Resistanc e zone can be used to EXIT a trade as well as ENTER a short TRADEwith SL above the resistance zone")
Support can be used as point to ENTER a TRADE and SL can be put below the support zone as an exit. Resistanc e zone can be used to EXIT a trade as well as ENTER a short TRADE
with SL above the resistance zone
COMBINING MULTIPLE EXIT STRATEGIES TOGETHER.
We can combine multiple strategies mentioned in the thread and combine them together to have a better confirmation to exit a trade.We can reduce wrong exits and fine tune our exit strategies
We can combine multiple strategies mentioned in the thread and combine them together to have a better confirmation to exit a trade.We can reduce wrong exits and fine tune our exit strategies
Kindly consider this thread as starting point and backtest
before using them in your TRADING.
There may be mistake in this thread,please let me know in comments.
I may have leftout out other ways to EXIT ,Do comment about them.
If you find this THREAD useful kindly RETWEET.
before using them in your TRADING.
There may be mistake in this thread,please let me know in comments.
I may have leftout out other ways to EXIT ,Do comment about them.
If you find this THREAD useful kindly RETWEET.
