Entry and Exit Decisions - Index Futures Trading | futures.io
futures.io futures trading


Entry and Exit Decisions
Started: by goodoboy Views / Replies:1,144 / 37
Last Reply: Attachments:17

Welcome to futures.io.

Welcome, Guest!

This forum was established to help traders (especially futures traders) by openly sharing indicators, strategies, methods, trading journals and discussing the psychology of trading.

We are fundamentally different than most other trading forums:
  • We work extremely hard to keep things positive on our forums.
  • We do not tolerate rude behavior, trolling, or vendor advertising in posts.
  • We firmly believe in openness and encourage sharing. The holy grail is within you, it is not something tangible you can download.
  • We expect our members to participate and become a part of the community. Help yourself by helping others.


You'll need to register in order to view the content of the threads and start contributing to our community. It's free and simple, and we will never resell your private information.

-- Big Mike

Reply
 17  
 
Thread Tools Search this Thread
 

Entry and Exit Decisions

  #21 (permalink)
The fun is in the numbers
Point Roberts, WA, USA
 
Futures Experience: Advanced
Platform: IB and free NT
Broker/Data: IB
Favorite Futures: ES
 
aquarian1's Avatar
 
Posts: 2,341 since Dec 2010
Thanks: 730 given, 1,063 received

Reisitance breakout

There are different kinds of breakouts

1. resistance breakout
1B double top
1C triple top
2. Channel

They are all "resistance" breakouts but I am breaking them apart for clarity.

I don't really think your example is a resistance breakout.

You need to be able to establish clear defining rules for a setup such that if a friend was sitting beside you reading the list of rules he would recognize the setup and know where to place the entry and the stop.

rleplae has a good point about stops.
So I marked FT (for failed trade stop).
Above I used the emergency stop in my examples
So if I'm watching the screen and I feel the trade has failed I'll kill it but that is more a discretionary thing and as you say for testing simplicity the hard stop (BTW soft stops have a danger in a flash crash or if your computer/internet goes down.

If you look at my example of a resistance breakout on your chart you will see
1. a good retracement giving a clear resistance
2. a way of determining a signal bar
3. how you set a FT stop for this.

Looking at your third example you will see that #3 would have got you out.
Please register on futures.io to view futures trading content such as post attachment(s), image(s), and screenshot(s).

Good trading to everyone.
Reply With Quote
 
  #22 (permalink)
The fun is in the numbers
Point Roberts, WA, USA
 
Futures Experience: Advanced
Platform: IB and free NT
Broker/Data: IB
Favorite Futures: ES
 
aquarian1's Avatar
 
Posts: 2,341 since Dec 2010
Thanks: 730 given, 1,063 received


goodoboy View Post
Thank you for response. An attachment is a few of how I trade breakouts using predefined support and resistances.

Can you explain what you mean by leg 1, retracement, final swing end? Maybe an example please?

Here is an example first the big view
Chart 1 - break of support (breakdown)
Chart 2 - swings and legs
Please register on futures.io to view futures trading content such as post attachment(s), image(s), and screenshot(s).



and then close-ups of the support and the breakdown.
(notice volume bars)

Please register on futures.io to view futures trading content such as post attachment(s), image(s), and screenshot(s).

Good trading to everyone.
Reply With Quote
 
  #23 (permalink)
Trading Apprentice
Houston
 
Futures Experience: Beginner
Platform: ThinkorSwim
Favorite Futures: ES,CL,NQ
 
goodoboy's Avatar
 
Posts: 25 since Dec 2016
Thanks: 7 given, 5 received



aquarian1 View Post
There are different kinds of breakouts

1. resistance breakout
1B double top
1C triple top
2. Channel

They are all "resistance" breakouts but I am breaking them apart for clarity.

I don't really think your example is a resistance breakout.

You need to be able to establish clear defining rules for a setup such that if a friend was sitting beside you reading the list of rules he would recognize the setup and know where to place the entry and the stop.

rleplae has a good point about stops.
So I marked FT (for failed trade stop).
Above I used the emergency stop in my examples
So if I'm watching the screen and I feel the trade has failed I'll kill it but that is more a discretionary thing and as you say for testing simplicity the hard stop (BTW soft stops have a danger in a flash crash or if your computer/internet goes down.

If you look at my example of a resistance breakout on your chart you will see
1. a good retracement giving a clear resistance
2. a way of determining a signal bar
3. how you set a FT stop for this.

Looking at your third example you will see that #3 would have got you out.
Please register on futures.io to view futures trading content such as post attachment(s), image(s), and screenshot(s).

Thank you aquarian1 for the response and detailed examples.

I mainly trading resistance and support breakouts. I agree with your analysis of true resistance breakout.

I am currently testing the following breakout signals to enter trade (I will use resistance as example):

1. Retracement: Enter trade at resistance if the low of first candle (first candle to open and close and low, above resistance) is above resistance price.
2. Retracement: If candle close above resistance, enter at open of next bar. I will catch all trades.
3. Buy Above: Enter buy stop market order 2 ticks above the high of candle that close above resistance. stop below breakout bar.
4. retracement: If candle close above resistance, wait for another candle to touch resistance (now support) and close above resistance, then enter on open of next candle.

I am not sure which one of these are better. Also, if R:R is not greater then 1, I don't enter the trade. I am cheap, so I personally like option 1. Alot of different scenarios to test. But if I don't test, I will never know.

Reply With Quote
 
  #24 (permalink)
Trading Apprentice
Houston
 
Futures Experience: Beginner
Platform: ThinkorSwim
Favorite Futures: ES,CL,NQ
 
goodoboy's Avatar
 
Posts: 25 since Dec 2016
Thanks: 7 given, 5 received


aquarian1 View Post
Here is an example first the big view
Chart 1 - break of support (breakdown)
Chart 2 - swings and legs
Please register on futures.io to view futures trading content such as post attachment(s), image(s), and screenshot(s).



and then close-ups of the support and the breakdown.
(notice volume bars)

Please register on futures.io to view futures trading content such as post attachment(s), image(s), and screenshot(s).


Thank you for explanination. Very detail and similar to how I trade.

A few questions. This is just general logical trade talk.

1. In your example of bar open and close below support, what about the high of that bar? Do you think a trader completely confirm the entire bar (including wick or high of bar) is below the support?

2.What if buying at the open of next bar creates a stop loss distance greater then the trader normal stop loss normally used. See picture for example. I believe it depends on the R:R for the trade. The target could be twice as big as loss. But this type of entry does guarantee the trader participates in all breakouts, win or lose.

Thanks

Attached Thumbnails
Entry and Exit Decisions-screenshot_8.png  
Reply With Quote
The following user says Thank You to goodoboy for this post:
 
  #25 (permalink)
The fun is in the numbers
Point Roberts, WA, USA
 
Futures Experience: Advanced
Platform: IB and free NT
Broker/Data: IB
Favorite Futures: ES
 
aquarian1's Avatar
 
Posts: 2,341 since Dec 2010
Thanks: 730 given, 1,063 received

Futures Edge on FIO

goodoboy View Post
Thank you for explanination. Very detail and similar to how I trade.

A few questions. This is just general logical trade talk.

1. In your example of bar open and close below support, what about the high of that bar? Do you think a trader completely confirm the entire bar (including wick or high of bar) is below the support?

2.What if buying at the open of next bar creates a stop loss distance greater then the trader normal stop loss normally used. See picture for example. I believe it depends on the R:R for the trade. The target could be twice as big as loss. But this type of entry does guarantee the trader participates in all breakouts, win or lose.

Thanks

Good questions.

The above was to answer your question about leg1, retrace and final leg - I needed an entry price to compute these. You asked what to record.

So though I'm not sure I think MFE is while in the trade, which doesn't answer the question what money did I leave on the table if I had traded it perfectly?

So, now this is for me you understand, I want to know:

1. How could have I seen this setup?
2. What firm rules should I have to get in the trade?
2B. What firm rules should I have to stay out of the trade?
3. What price, or time, should I enter to balance between too early, too late, missing the trade completely?
4. Does this setup have the potential to give a very nice RR?
5. How often will my trade rules get me in this setup when I would want to be in and how often to they keep me out of a trade I want to be kept out of?
6. Does this setup have a measured target? That is does this setup, within itself, its context, its formation, have an estimate of the final swing (low or high)?

-----------------------
On question3.
Entering the trade correctly is VERY IMPORTANT in my opinion. The reason is exactly as you have mentioned.
If you enter too late then your stop may be so far away that the potential loss on the trade is too big.
Now your trade's potential RR is badly slewed and you might be better to stay out.

So many times I have broken "my rules" and not wanting to miss the trade have entered at less than the optimum price, then seen it reverse on me and watch my Loss rising - sweating -- then it reverses, now going in my direction -- after an eternity I am back to BE and then faced with th decision to close or hold -- but after all the time sweating it is easier to close -- then no sooner than I close does the blanketly- blank zoom into what would have been a lovely winner.

However, if you enter at the very best price, you are never in the "heat". The trade just keeps getting more and more profitable and you relax and can clearly compute the best exit.

Sayings:
"It's better to be out of a trade wishing you were in than in a trade wishing you were out."
"Nobody's IQ goes up once in the trade."
"It all seems so clear in hindsight."

Unless you are enormous rich with an enormous line (or trading someone else s dough to whom you are not emotionally attached) the emotions vs "logic" are the traders dilemma.
---------------------------

Good trading to everyone.
Reply With Quote
The following user says Thank You to aquarian1 for this post:
 
  #26 (permalink)
The fun is in the numbers
Point Roberts, WA, USA
 
Futures Experience: Advanced
Platform: IB and free NT
Broker/Data: IB
Favorite Futures: ES
 
aquarian1's Avatar
 
Posts: 2,341 since Dec 2010
Thanks: 730 given, 1,063 received

Multiday Trend MDT

So continuing, The MDT is the context of the short term.

Here I have attached a 45 min chart and on it drawn three channels:
up
sideways
and down.

So the newly emerging downtrend gives a good short opportunity on a MD basis.
The beginning of a new MDT give a great context for a shorter term day trade in line with and in conjunction with the downwards MDT.

The rectangle formation gives a solid foundation, a reliable formation, to establish a series of trades short term day trades to the short side.

Please register on futures.io to view futures trading content such as post attachment(s), image(s), and screenshot(s).

Good trading to everyone.
Reply With Quote
The following 2 users say Thank You to aquarian1 for this post:
 
  #27 (permalink)
The fun is in the numbers
Point Roberts, WA, USA
 
Futures Experience: Advanced
Platform: IB and free NT
Broker/Data: IB
Favorite Futures: ES
 
aquarian1's Avatar
 
Posts: 2,341 since Dec 2010
Thanks: 730 given, 1,063 received

combine MDT and short term

Here are charts with notes
You can see how this impacts your questions.

To me the answer is that the entry is "at near open" using some short term indicators to confirm the price.

Good trading to everyone.
Attached Thumbnails
Entry and Exit Decisions-temp1.png   Entry and Exit Decisions-temp2.png  
Reply With Quote
 
  #28 (permalink)
Trading Apprentice
Houston
 
Futures Experience: Beginner
Platform: ThinkorSwim
Favorite Futures: ES,CL,NQ
 
goodoboy's Avatar
 
Posts: 25 since Dec 2016
Thanks: 7 given, 5 received


aquarian1 View Post
Good questions.

The above was to answer your question about leg1, retrace and final leg - I needed an entry price to compute these. You asked what to record.

So though I'm not sure I think MFE is while in the trade, which doesn't answer the question what money did I leave on the table if I had traded it perfectly?

So, now this is for me you understand, I want to know:

1. How could have I seen this setup?
2. What firm rules should I have to get in the trade?
2B. What firm rules should I have to stay out of the trade?
3. What price, or time, should I enter to balance between too early, too late, missing the trade completely?
4. Does this setup have the potential to give a very nice RR?
5. How often will my trade rules get me in this setup when I would want to be in and how often to they keep me out of a trade I want to be kept out of?
6. Does this setup have a measured target? That is does this setup, within itself, its context, its formation, have an estimate of the final swing (low or high)?

-----------------------
On question3.
Entering the trade correctly is VERY IMPORTANT in my opinion. The reason is exactly as you have mentioned.
If you enter too late then your stop may be so far away that the potential loss on the trade is too big.
Now your trade's potential RR is badly slewed and you might be better to stay out.

So many times I have broken "my rules" and not wanting to miss the trade have entered at less than the optimum price, then seen it reverse on me and watch my Loss rising - sweating -- then it reverses, now going in my direction -- after an eternity I am back to BE and then faced with th decision to close or hold -- but after all the time sweating it is easier to close -- then no sooner than I close does the blanketly- blank zoom into what would have been a lovely winner.

However, if you enter at the very best price, you are never in the "heat". The trade just keeps getting more and more profitable and you relax and can clearly compute the best exit.

Sayings:
"It's better to be out of a trade wishing you were in than in a trade wishing you were out."
"Nobody's IQ goes up once in the trade."
"It all seems so clear in hindsight."

Unless you are enormous rich with an enormous line (or trading someone else s dough to whom you are not emotionally attached) the emotions vs "logic" are the traders dilemma.
---------------------------


Hello aquarian1,

I completely experienced and understand all the above.

When i start getting serious about my account and my trading, I started calculating my mistakes and my losses.

I have like 4 ways to enter breakout trades and all are being manual backtesting. From now on, i need evidence before taking trades. It helps for stress.

Also, to make things further simpler for me, I stick to 1-3 trades per day. However, while backtesting I trade all setups for stats analyzing.

Reply With Quote
The following user says Thank You to goodoboy for this post:
 
  #29 (permalink)
The fun is in the numbers
Point Roberts, WA, USA
 
Futures Experience: Advanced
Platform: IB and free NT
Broker/Data: IB
Favorite Futures: ES
 
aquarian1's Avatar
 
Posts: 2,341 since Dec 2010
Thanks: 730 given, 1,063 received


goodoboy View Post
(I will use resistance as example):
1. Retracement: Enter trade at resistance if the low of first candle (first candle to open and close and low, above resistance) is above resistance price.
2. Retracement: If candle close above resistance, enter at open of next bar. I will catch all trades.
3. Buy Above: Enter buy stop market order 2 ticks above the high of candle that close above resistance. stop below breakout bar.
4. retracement: If candle close above resistance, wait for another candle to touch resistance (now support) and close above resistance, then enter on open of next candle.

I am not sure which one of these are better. Also, if R:R is not greater then 1, I don't enter the trade. I am cheap, so I personally like option 1. Alot of different scenarios to test. But if I don't test, I will never know.

Is your testing to tell you which setup(s) will be profitable ?
or
Is it to try and build an automated system?

Good trading to everyone.
Reply With Quote
 
  #30 (permalink)
Trading Apprentice
Houston
 
Futures Experience: Beginner
Platform: ThinkorSwim
Favorite Futures: ES,CL,NQ
 
goodoboy's Avatar
 
Posts: 25 since Dec 2016
Thanks: 7 given, 5 received



aquarian1 View Post
So continuing, The MDT is the context of the short term.

Here I have attached a 45 min chart and on it drawn three channels:
up
sideways
and down.

So the newly emerging downtrend gives a good short opportunity on a MD basis.
The beginning of a new MDT give a great context for a shorter term day trade in line with and in conjunction with the downwards MDT.

The rectangle formation gives a solid foundation, a reliable formation, to establish a series of trades short term day trades to the short side.

Please register on futures.io to view futures trading content such as post attachment(s), image(s), and screenshot(s).

Great presentation aquarian1. I appreciation the examples.

In your example, I per my rules (being tested) I would not enter the short at the orange arrow because a predefined support (2240) was already touched by price and this could be a reversal starting a new trend upwards.

I would wait until the next support (2240) was broken before taking the short.

At the orange arrow is where I would be considering a long breakout.

However, I want to try another breakout energy with emas to confirm the trend before entry. Cause the long breakout, would not be apart of the trend.

Thanks

Attached Thumbnails
Entry and Exit Decisions-screenshot_9.png  
Reply With Quote

Reply



futures.io > > > > Entry and Exit Decisions

Thread Tools Search this Thread
Search this Thread:

Advanced Search



Upcoming Webinars and Events (4:30PM ET unless noted)
 

Anthony Drager: Pulling the trigger with confidence

Elite only
 

Leo Murphy: The Art and Science of Technical Analysis

Elite only
 

FuturesTrader71: Ask Me Anything

Elite only
     

Similar Threads
Thread Thread Starter Forum Replies Last Post
the best entry and exit point? henrick duda Stocks and ETFs Trading 3 April 19th, 2015 10:53 AM
Entry/Exit optimization strategy vetl Elite Automated Trading 11 June 20th, 2014 08:13 AM
Which upgrade from Windows XP? Decisions, decisions. Buscador Tech Support 27 May 9th, 2014 01:39 AM
How to exit the day after entry? Orjan EasyLanguage Programming 14 November 4th, 2013 11:22 AM
a simple entry exit bar johni EasyLanguage Programming 7 July 23rd, 2011 05:34 AM


All times are GMT -4. The time now is 07:16 PM.

no new posts
Page generated 2017-01-23 in 0.20 seconds with 40 queries on phoenix via your IP 54.205.153.63