What is your exit strategy?

nizar · 27 May 2007

tech/a said:
The trade itself when taken was in a corrective phase and one which would be seen by this poster as very low probability (At the time).Not a trade I personally would have taken---much better around.

Tend to agree.
ZFX has been sideways for the last several months.

R0n1n, maybe entries is another thing to look at as well?

Edwood · 27 May 2007

Evening all - some interesting stuff on this thread! thought I'd add my 2pence worth

Looking at the 12 month view agree with the earlier posts - sloppy choppy for a while now & looking 4-ish after the rise so there's potential for a wave 5 higher (assuming the overall market holds up of course!) if you 'have' to trade when its sideways like this Ronin in my view you could do worse than switch on bollinger bands & trade the range. have a look, there were some good opportunities there

Strong negative divergence b/w price & MACD was a good early warning sign of pending reversal - confirmed with the break of trend line

I added the weak +ve divergence just to show it working again - but it was very weak. higher low in the MACD also warned of a long set up tho

Personally am not convinced with using MACD cross-over on its own, they lag

re: entries - price breakout above or below the MA is the one you always want to get

Think as Tech says wave 4's aren't much fun - better to look around for something else if you can

All the best!

Ed

motorway · 27 May 2007

My view would be;

It's in a trading range..

Active ranges build trends

At the arrow I have first definitive signs
That there has been accumulation happening.

I have good volume ( relative ) off the bottom
of the range with clear evidence of demand overcoming supply

A sign of strength which must be confirmed by a Last point of supply

The last bar has a close nearer the high and some volume
It clearly ran into demand
possibly setting up that higher point of support.

Too much price spread and too much vol
To buy now ( For Me and My time frame ).

Looking for a move up with more strength
and the next retest
if it has narrower spread
and lower volume showing supply drying up

could ( COULD ) have the stock on the springboard

( Think of a diver bouncing up and down.. There is a springboard under Him
That even if We can not see it . We can see the springy support it gives )

Between the arrow and the ? .. The rally top shows a lack of demand willing to reach higher...

Ranges form because demand overcomes supply at the bottom
and supply overcomes demand at the top

The SOS suggests the buying on balance is better then the selling..

Everything is pending UNTIL CONFIRMED..
If the price falls to the lower support line on good volume
Then the SOS is unconfirmed

If price moves up from near this halfway point
Strength is being further confirmed.
The SOS by the relative strength in the subsequent reaction( where We are )

motorway

motorway · 27 May 2007

Between the arrow and the ?

motorway · 28 May 2007

Strong negative divergence b/w price & MACD was a good early warning sign of pending reversal

Correct Me if I am wrong

But the divergence was being created
by the actual price action..

What I called

A shortening of the thrust of the rallies
and the relative strength of the reactions
That is what is showing up in a second order derivative of the price action.
The MACD

Is anything more responsive than the price action itself?

The MACD has to be lagging.
But also non optimal
It has a fixed look back of, with your settings

12 16 9

They will only be perfectly optimal
with a certain bar spacing of top to top and bottom to bottom.

The MACD gets around to telling Us that this rally has made less headway than the last.. But after it has happened and with less accuracy imo
than actually measuring the distance and spacing of the price action itself.

All indicators only tell you what
price, volume and time
have already told you with exact precision...
because the price action is not lagging or non-optimized..

It just is

cheers
motorway

ps... The same tools that get Us into the trade are the same tools that determine the (potential) exit from the trade..

wayneL · 28 May 2007

motorway said:
Correct Me if I am wrong

But the divergence was being created
by the actual price action..

What I called

A shortening of the thrust of the rallies
and the relative strength of the reactions
That is what is showing up in a second order derivative of the price action.
The MACD

Is anything more responsive than the price action itself?

The MACD has to be lagging.
But also non optimal
It has a fixed look back of, with your settings

12 16 9

They will only be perfectly optimal
with a certain bar spacing of top to top and bottom to bottom.

The MACD gets around to telling Us that this rally has made less headway than the last.. But after it has happened and with less accuracy imo
than actually measuring the distance and spacing of the price action itself.

All indicators only tell you what
price, volume and time
have already told you with exact precision...
because the price action is not lagging or non-optimized..

It just is

cheers
motorway

ps... The same tools that get Us into the trade are the same tools that determine the (potential) exit from the trade..

Exactly,

I have found by de-constructing the indicators (and MACD is a dead easy oner to do), one can "see" indicator divergences in the raw price action as you have stated.

You know what the indicator will show without even having to look at it, making the indicator redundant. (as it aways is anyway)

They have a use in scanning in my trading (and adding colour to the chart ) but that's it... the odd time as a crutch.

It's Snake Pliskin · 28 May 2007

wayneL said:
Exactly,

I have found by de-constructing the indicators (and MACD is a dead easy oner to do), one can "see" indicator divergences in the raw price action as you have stated.

You know what the indicator will show without even having to look at it, making the indicator redundant. (as it aways is anyway)

They have a use in scanning in my trading (and adding colour to the chart ) but that's it... the odd time as a crutch.

With some degree of hindsight advantage, I see indicators as nothing but propping up software selling capitalists that make money of the unsuspecting.
this is not to say some indicators are useless, RSI, MACD stocchie do prove useful at times.

Edwood · 28 May 2007

motorway said:
Correct Me if I am wrong

But the divergence was being created
by the actual price action..

The MACD gets around to telling Us that this rally has made less headway than the last.. But after it has happened and with less accuracy imo
than actually measuring the distance and spacing of the price action itself.

All indicators only tell you what
price, volume and time
have already told you with exact precision...
because the price action is not lagging or non-optimized..

It just is

cheers
motorway

ps... The same tools that get Us into the trade are the same tools that determine the (potential) exit from the trade..

sure thing re: price action & indicators M.Way, I find MACD an easy way to see the trend breaking down - works fine for my approach and no need to change it. agree you can't beat the raw price - & with simple indicators like a simple MA + MACD would have given the best move in the last 12 months within a 6-8 week period

Given the sensitivity of your P&F chart I'm not sure why you've asked about exit strategies - it looks as tho you are in this as a long-term play? but exiting on a break of the trend line could be one way to get out. however with that triple top breakout looming....

all the best

Ed

tech/a · 28 May 2007

Edwood.

Motorway isnt looking for answers just suggesting a few.

Edwood · 28 May 2007

yes you're right Tech!! my apologies Motorway! Ronin asked about the exits, not you - am obviously spending too much time in front of the screen

I'll get back to me indices & leave you guys to it

Ed

PS - off topic - how come your Updata P&F doesn't print O's Motorway?

rowes · 28 May 2007

Hi,

I get out when the reason for being in the trade is no longer aparent rather than a %. I am into candlestick anlasis though.

motorway · 28 May 2007

The P&F of this program is at the top rank

The first chart is a 1 box reversal chart
I want to highlight the flow of demand and supply
and it's topography

like a river flowing through a mountain range
called demand and supply

looking for ceilings and floors
esp looking at congestion

up and down in this case are red herrings
It is shape and flow to be focused on

so better to use just x and note,
the proper scaling and in your terminology X and O s in the same column
keeps horizontal areas tight and defined

P&F reduced to just a break out method
looses a lot..

The box size is to filter out all swings
except those of smart money..filter out noise

So with this chart it is not stand alone
integrate with the bar chart ( or smaller box sixe P&f )
( though note the trend line on the chart gave a high priced exit point
with the cross of the trend line ( P&F dose not scale through time , but through volatility )..

The fluctuations directly are caused by differences of opinion
and not moving across just because another day has passed..

will draw log box sizes, relative strength charts
scan for trend line breaks ,, will chart any other line as a P&f
eg OBV...Will do P&F market breath charts, bullish %

Just Xs is the same reason why just blue bars on the bar chart
red and green are not stop and go

It is waves of action.. flow

I could draw that chart with X and O

here is the three box reversal
of the same box size with X and O

Bar charts & P&F charts
confirm and qualify each other

P&F because there is NO time is an efficient way to scan whole mkts

motorway

R0n1n · 28 May 2007

Thanx to you guys I havent got off Qantas yet and enjoying the flight

Edwood · 28 May 2007

motorway said:
The P&F of this program is at the top rank

The first chart is a 1 box reversal chart
I want to highlight the flow of demand and supply
and it's topography

like a river flowing through a mountain range
called demand and supply

looking for ceilings and floors
esp looking at congestion

up and down in this case are red herrings
It is shape and flow to be focused on

so better to use just x and note,
the proper scaling and in your terminology X and O s in the same column
keeps horizontal areas tight and defined

P&F reduced to just a break out method
looses a lot..

P&F because there is NO time is an efficient way to scan whole mkts

motorway

yeah I like Updata's P&F capability Motorway but now trade intra-day mostly and didn't want to pay Updata for their live feed service plus am not UK anymore and wanted support in local hours so dropped their product.

well done Ronin with sticking with Qantas. would be interested to hear when you exit & why after the various commetns!

cheers

Ed

motorway · 28 May 2007

There is supposed to be an optimized esignal
version coming out end of June

That should give you any mkt and any time frame...

I have it linked to a metastock database atm

motorway

R0n1n · 28 May 2007

Edwood said:
well done Ronin with sticking with Qantas. would be interested to hear when you exit & why after the various commetns!

cheers

Ed

I ain't exiting yet.. although watching closely as RSI is 88.

Kauri · 28 May 2007

Re: what is ur exit strategy ?

R0n1n said:
I'll explain my earlier question with an example. I had bought ZFX at 16.75 (green line on chart) and took an exit on 17.61 (red line on chart) . ZFX ofcourse went on to make it to 17.90 before finally turning around.

Was there any indicator that would have told me to hang on to the ride ?

ronin
I took a trade (actually 2 trades) in ZFX at the same time/price as your example, in, I thought, an impulsive opposed to corrective phase???.. the first trade was a short term trade to catch 2R+ in a short time, closed that out i think 4 days later at the same level as you for 2R..
The other trade was taken at the same time with a longer time frame in mind.. i.e to get on a 5 wave impulse at W1..and if it panned out then to pyramid in if the opportunity presents on W3 and agian on W5... the details and rasoning I think I posted real time on the ZFX thread. Bear in mind my trading is a work in progress, and I tend to make as many, if not more, mistakes than the next bloke.

Tech,
With your AGet setup, if the price does drop down to the blue elipse in what you have labelled as a W4 correction wouldn't that invalidate the count with W4<W1 ??

tech/a · 28 May 2007

Kauri.

The Blue Ellipse,the grey ellipse and price will all come together.
But yes if that did occur it would invalidate the count and the count would be re labelled by GET.

tech/a · 6 June 2007

From the Entry thread.

MTN.
There is a 2 bar weakness shown in the current MTN move.
Trailing stop would be at $5.94 the low of the last 2 bars.
Notice the attempt to sustain higher prices which fail (shown in the range of the bar and close near the low) and the sad lack of Volume to support buying.

nizar · 6 June 2007

tech/a said:
From the Entry thread.

MTN.
There is a 2 bar weakness shown in the current MTN move.
Trailing stop would be at $5.94 the low of the last 2 bars.
Notice the attempt to sustain higher prices which fail (shown in the range of the bar and close near the low) and the sad lack of Volume to support buying.

Tech.
Do you use end of day stops or intraday?

What is your exit strategy?

nizar

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