I have received several email messages from my readers asking about how to best determine entry and exit strategies when trading markets. Here are just a few of their quotes:
"Though my success rate has been high, I am only breaking even financially, due to getting out too early in profit and letting my losses run too far."
"Many articles are written showing when and where to enter trades... but how many articles are written about "running" positions? Where to exit surely has to be the biggest key to trading success!"
"I would appreciate some advice or tips on how to and when to enter a market and when to exit."
Of course, if a trader knew exactly when to get into a market and when to get out, wouldn't trading be easy! But even the most successful traders in the world can't do that. The best they can strive for is to catch a bigger part of any move (trend) in the market, and then get out with a good profit before the market turns against them.
I've written past articles on trading with the trend and not against it, on the perils of trying to pick tops and bottoms, on support and resistance, and on letting profits run and cutting losses short, as well as trading the "breakouts." I won't repeat all those trading tenets here, but if you've missed some of my articles, drop me an email and I can attach some of them in an email to you.
In this article, I'll get more specific on entries and exits, and what to do if you are in a trade and are accumulating profits or absorbing losses.
First of all, if you are in a trade, you should already have a general plan of action in place, including potential entry and exit points, before you entered the trade. Certainly, you can alter your plan of action in the heat of battle, but you should not enter any trade without having a well-thought-out trading plan. Also in your trading plan you can have a few scenarios that could occur and what you would do if they did occur.
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Entry and Exit Strategies by Jim Wychoff
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2. Hot Market: Gold Bulls Looking Strong
By Steven Nimerov, Senior Broker
Click on image below to enlarge
Strong investor buying,fear of negative interest rates spreading globally,big increases in gold derivative holdings to the highest level in 1 ½ years and a sense that we are beginning to transition from deflation to re-inflation is creating a “perfect storm” scenario of bullishness for the Gold market.Technically,looking at the weekly “close only” chart below,a close today,Friday,over approximately 1,239.00 would signal another leg up in Gold prices with a potential objective of 1,360.00 to 1,380.00, by my calculations. If you like to have a second opinion on any market with Steven or any of our senior brokers, please Contact Us
6:00 AM CST - MBA Mortgage Purchase Index
9:00 AM CST - Wholesale Inventories(Jan)
9:30 AM CST - API & DOE Energy Stats
11:00 AM CST - WASDE Report & Crop Production
2:00 PM CST - Dairy Products Prices
7:30 AM CST - USDA Weekly Export Sales
7:30 AM CST - Intial Claims-Weekly
9:30 AM CST - EIA Gas Storage
1:00 PM CST - Treasury Budget(Feb)
LT: Mar Nikkei(CME)
Mar Nikkei Options(CME)
7:30 AM CST - Export(ex-ag) & Import(ex-oil) Prices(Feb)
* Please note that the information contained in this letter is intended for clients, prospective clients, and audiences who have a basic understanding, familiarity, and interest in the futures markets.
** The material contained in this letter is of opinion only and does not guarantee any profits. These are risky markets and only risk capital should be used. Past performances are not necessarily indicative of future results.
*** This is not a solicitation of any order to buy or sell, but a current market view provided by Cannon Trading Inc. Any statement of facts herein contained are derived from sources believed to be reliable, but are not guaranteed as to accuracy, nor they purport to be complete. No responsibility is assumed with respect to any such statement or with respect to any expression of opinion herein contained. Readers are urged to exercise their own judgment in trading!
RISK DISCLOSURE: Past results are not necessarily indicative of future results. The risk of loss in futures trading can be substantial, carefully consider the inherent risks of such an investment in light of your financial condition.