Which is more important - the entrance or the exit? Is the entry point even important? Is the exit point even important? - page 6
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In my view, this division of "which is more important - entry or exit" is fundamentally flawed. They are two sides of the same coin. And this medal will be a medal only if it is a whole. Otherwise, when one of the sides is defective it will not be a medal ...
like that...
Sat )
Interested in an opinion on all three questions, preferably with an intelligible explanation of why.
The answer should not depend on the trading system used.
I will give my opinion later ) if necessary.
I do not understand the subject. Of course, both entry and exit are important components for successful trading in the market.
If the market entry may be bad, a successful exit can compensate for losses on entry and vice versa.
If entry and exit were unimportant, then one would be free to go wild and make a profit ))))
The well-known phrase of the cat Matroskin: "To sell something unnecessary, you first have to buy something unnecessary, and we have no money." In our case, this means that an exit is only possible if there was already an entry, so the exit cannot be more meaningful than the entry. A kind of conditional probability (love it here).
Now, about entry and exit points. The logic is reversed here. If I'm already in the market, the entry point is of no interest to me, but exit is my main headache. If I'm still in a low start, the exit is of little interest to me, and the entry point is a subject for consideration, but - without fanaticism (if psyche does not rebel).
Therefore:
1. Entry is more important than exit.
2. the entry point is important until the entry point.
3 The exit point is extremely important from the point of entry to the point of exit.
What's there to describe?
Let's simplify it down to three states:
1. Assume growth.
2. Assume decline.
3. the hell knows.
In the first case, we buy; in the second, we sell; in the third, if there is no position, we do not do shit, and if there is, we exit.
I do not agree about the priority of entry.
If you say: You entered buy because you expect the instrument to grow, it went there (up), but, hoping to get more profit, you didn't enter in time, the instrument rolled back and went to the loss zone... But don't write that the entry point was defined incorrectly, because the pullback followed some time after the entry!
In the literature (I don't remember the reference) they recommend to test and check entry-exit separately, i.e. 1. entry by MSG - exit - by TS. 2. Input by TS - output through N - bars, where N - external variable.
After that: In the optimizer the variants of output by the TS at random entry, exit through N - bars are optionally selected. Then it is analyzed (to evaluate QUALITY of separate IN/OUTs), variants are selected, optimized together - the output is GRAAL!
Not enough? Greed leads to poverty. It is enough.
This is not "greediness leads to poverty" - it is called the absence of profit. What about "Cut losses, let profits grow" as well?
North is right there.
As to the subject of the branch: entering/exiting an aggregate position in a symbol should be done in parts, the so-called "smeared entry point", at the exit to the profit and the subsequent movement of the symbol in the direction of open orders - we scale in. Exit - on the TS signals.
Opinion supported: p. 333 D. Katz, D. McCormick. "Encyclopedia of Trading Strategies ".
"The results clearly show that many of the entry strategies used in the previous chapters were no better than random entries,
and sometimes worse. It is also shown that the standard exit strategy
is far from being optimal. The modified strategy that simply
allows exiting the market at intraday prices (and not only at
closing prices) worked much better and even managed to provide some profits in long positions
. The MSSV strategy remains a minimalist
but nevertheless shows that it is good exit strategy
that is the key to successful trading.
If the findings of this and
previous studies are correct, it is possible to find an exit strategy,
capable of actually generating significant profits based on random entries, at least in some markets.
Such a strategy will confirm
what many great traders have said: an experienced trader who skillfully manages capital can make a profit even with a bad system
, while a beginner with no money management experience will lose
money even with a great system. By system
here we mean the entry model. All future tests in this
book will use a modified exit strategy."
Have you seen the film Battleship Potemkin?
So why don't you give a damn about the system?