The Daily Market Forecast... Art in Exits

Tuesday’s Results: The suggested short ran for 17.50 points with only 1.50 points adverse.

Quick Tip: Art in Exits

Dozens of different methods of trading can be profitable. If you doubt this statement you need to read any of Jack Schwager’s “Market Wizards” books.

In each book he interviews top traders from around the world. Dozens of them. What you’ll find is that almost every trader has a different take on how to trade. Some use technical indicators successfully. Others focus on algorithms. Still others use fundamentals and macroeconomics. Some are systems traders. Others are discretionary. The list of differences between them is long.

What they ALL have in common is profitability.

If your belief system has you stuck trading one way because your guru told you it’s the only way then this book series will open your eyes and mind. Enjoy it.

After reading his book series I began to look at my trade setups with a new view. Who will be on the other side of the trade? While I don’t trade the dozens of strategies I’ve learned (focus is more important) I do think about what other successful traders will be doing when I’m EXITING. The money is won or lost on the exit, not the entry. Managing open profitable trades is as much ART as SCIENCE.

Looking at the chart above you can see the trade went 17.50 points in your favor. Doubtful you could have picked that exit and filled. So how much was the trade worth? One method to consider is the pivot stop. Look at the prior pivot high swings and trail stop them. That would get you 8+ points per contract, or about half the move. That’s just one way. Experiment with others and document your results. In the end you need evidence to be confident.

Today’s Best S&P Turning Points:

Sell 4114.00 stop 4119.75.

Buy 4008.50 stop 4002.75

Trade Fearlessly,

Mike Siewruk

P.S. What’s more important in trading? Math or emotions? Learn how to change your unwanted behavior here.