One of the easiest ways to improve your trading system is to work on your exits.
By adapting your exit plan to market conditions, you get the best chance to let your profits run – and not give them all back when the market reverses direction.
If you want to learn more about this, I wrote this two-part article on Van Tharp’s website:
Here is what one kind gentleman had to say about the articles:
“I just finished reading your report on exit strategies in the Van Tharp Institute newsletter. That is really great information and quite possibly what my two trading strategies have been missing… Your more complex exit strategies make complete sense to me and I will start applying them immediately. I just wanted to say thank you for writing the article and I look forward to keeping track of your blog”.
(As a writer/blogger I really appreciate feedbackJ)
Executing Your Exit Strategy Flawlessly
Executing your exit strategy in shifting market types is not as simple in practice as it is in theory. There’s a lot to keep track of, and price action can be volatile at the best of times.
You need to keep tabs on the current market type, and be mindful of the applicable exit rule at a minimum. If you’re scaling in and out of your position(s), you need to be aware of the multiple rules for doing so in any given market type. As you can see, this can become a little unwieldy.
Help is at hand.
One of my students had the bright idea to put together a matrix of exit rules and market types on a spreadsheet. I volunteered to put it together, as long as I could share it with you. Here it is:
So you can see it in action, here is an example of the cheat sheet that I am using for the work in progress that is this strategy (it includes some changes that will be implemented in future).:
About the Author
Sam Eder is a currency trader and author of the Definitive Guide to Developing a Winning Forex Trading System and the Advanced Forex Course for Smart Traders (get free access). He is a co-owner of Forex Signal Provider FX Renew (Get a FREE 30-day trial). If you like Sam’s writing you can subscribe to his newsletter.