Today I learnt something interesting re. exits

[Gareth Jones 0]

Hi all,

Newbie, still paper account trader here.  I'm making progress and feel like I'm probably a couple of weeks away from being able to go live.  Anyway I thought I'd share something I found interesting today. 

One major hurdle I'm struggling to get over is not letting my profits run: I tend to exit prematurely from trades, maybe only taking 1R maximum of profit. 

Since I've started properly journaling using ChartLog I've noticed that for most trades, if I'd stayed in the position until it crossed back over the 20EMA I would have made significantly more.  Today I did the sums of exactly how much more and here they are pretty surprising (to me at least):

 

Today I took 9 trades in total, the 'Actual' Column is how much I made or lost in terms of R (which is always fixed for my trades, today R was $250).  In the 'if exited at crossing 20EMA' column is what would have happened if I'd waited until the price went in the opposite direction and I'd got out when it crossed the 20 EMA.  On the bottom row is a sum of the values for each trade.

So basically today I broke even trading-wise, however had I exited when either being stopped out, or once it had crossed the 20 EMA - I would have made 20R or $5,000 in paper money terms(!).

Will report back tomorrow if I manage to change this annoying trading behaviour!!

GazJ.

 

[SeaDub 2]

This is interesting to me. I'm also a newbie paper trader at the moment. I relate to the taking exits early and am trialing ChartLog and Tradersync to figure out a good journal. Any updates on trying it out and if it's working?

[Rick Lee 10]

@Gareth Jones, any update on how this strategy has been working for you?

[Gareth Jones 0]

To be honest since the post I've changed my strategy pretty significantly, I was finding that I didn't have enough time in the day to commit to trading on short time frames through DAS so I've switched to swing trading which is going better. 

I still use the 9EMA crossing 20EMA as an exit signal and time my entries based on Fib support / resistance and it seems to be working well.  I'm finding it much easier to stick to the plan on a longer timescale as well, guess I wasn't realy cut out for that style of trading (for the mean time at least)!

Good luck guys!