Trader Mike

Here’s a comment that Justin left yesterday:

I read many charts these days and have some sense about enter a trade . For example, when 50 ema cross 200 ema and use kd as enter signal. It’s not bad for entry. After i coded my though and do back testing on tradestion. The result is not that positive cause I have to add exit signal for a complete strategy . For many times, even the entry is good, but the exit is bad that blow off the profit . The kd or rsi is very sensitive and in /out too often. I am very frustrated about exit strategy and would like to ask your help. What kind of exit methods …

Here’s an interesting article which discusses entries vs. exits. I certainly agree with the author that most people place way too much importance on entries and not nearly enough on exits. I know from my email that some of you are having trouble keeping your losing trades small. I used to have the same problem and the only way I was able to overcome that was to put in stop losses as soon as I was filled on my entry.

Most traders blow out because they hold on to losers. The winning trades take care of themselves. Focus on a game plan to exit when you are wrong and make sure it is in place …

A friend just e-mailed this article to me, so I thought I’d also pass it along: My Best Trailing Stop Techniques. Exits are one of the most important aspects of investing/trading, yet far too many people plan how they’re going to get out of a stock. Trailing stops are a great way to manage exits. Here’s just a part of the article (emphasis added by me):

Most investors and traders spend far too much time focusing on how to enter a stock, and far too little time focusing on how to best exit a profitable position. What is particularly interesting regarding this neglect is that most traders make the vast majority of their profits in a …