Originally Posted by kermut

Hi Vegas,

I know it is a bit late to reply to your post abt exits, but haven't been able to get to the thread due to wrk.

I have two favourite sayings abt forex
1. Profit is profit
2. Exits determine whether you get to buy a mercedes or a ferrari! (I sort of parapharased here!!)

Nearly every system/method has discretion as part of its exit strategy. That is where experience, comfort zone, mental prepartion, and most of all, faith in the system come in.

I would like to share with you my personal strategy for exits, and I am sure it is the least profitable, compared to summit, rad and itguy. It has been adapted from another trader from another forum, but since I have started following it, my trading is better, and my mental attitude is more balanced.

- I have a monthly plan, which is to basically average 10 pips per day. This is printed out as an excel sheet and pasted next to my keyboard. This allows me to grow my balance at a level that I would like (wouldn't we all like more). Why 10 pips - because the less time you are in the market, the less oppurtunity it has to take your profits from you. I had started with a target of 5 pips, but when I realised how profitable this method is, I halved my leverage, and doubled the pips target - sl stays the same, so my $ loss when sl is hit is reduced.

- When I have reached the 10 pips for the day, I stop live trading. But continue demo trading. This allows me to be free from the pressure of thinking abt a trade, spend time with family, but above all else, the market can not take it back from me.

- I still demo trade, the same set ups that I am doing live, with targets that I initially thought it would reach (usually far in excess of 10 pips). and eg. of this was the eur/jpy trade I took last nite, I entered at the set up when it went thru 4/8 murray level, and my target was 0/8 murray level, as there was a fib level at that level as well. CONFLUENCE, look for it, and you will be amazed how accurate it can be. This level was about 45 pips away. Took my 10 pips off, made mental note of what I had projected as target, and watched it. Training your mind to watch a trade that you are out of, go more in profit is also a very good thing, prevents u over trading in the long run.

- Once balance is high enough to afford to double my trading size, I shall take half off at +10, and trail the rest. This is what makes christmas come early.

Like I said, it is probably the least profitable from the others that are using it, but it is good training, and you will actually be amazed at how much the stress is reduced. Once I get to the level of summit, itguy, and rad to be able to follow the trade for its full potential, I'll shout everyone drinks ;-)

Until then, ten pips per day is the goal.

Cheers,
K.

PS. I apologise for the long post guys, but thought it would help vegas and others about the money management, and exits.