Targats and Exit stratergies

[john_1]

PArt of a conversation with Chartist Heres how I see it..I hope you will post this cause im taking more trouble with this than one person is worth? Firstly there seems to be some confusion between targets and exits. The two are not the same nor are they a function of each other. Its quite disturbing that exits and expectations could even be mentioned in the same sentence. A target is something you have control over an exit is not. Targets need to be realistic, achievable and maximize the resources available. Having a target that is too low or too high is equally destructive to moral and self esteem. Now in the realm of trading targets will always be a function of: Capital available Market volatility Trader skill Time available to trade ...note this is not the same as time in the market but refers to time available to hang around for opportunities. My day trading rough rule of thumb is as follows: For each 1 contract of capital per man day ZAR 1000 per day....low volatility..daily ADX above 20 ZAR 1500 per day daily ADX above 30 So a realistic monthly target would be 1250 (Taking an average of vol) X 20 = R 25K. Very very achieveable. Presently a contract ia ZAR 16500...so u would need (in my opinion) 25 K of capital to allow for a cushion. Targets must be repeatable..I say this again targets must be repeatable...u must be able to make your targets like a machine month in month out. How else you set your standard o living? So much for targets. All this stuff about .."of just take what the market gives u" is all *****. Without targets you will never be able to improve or benchmark yourself. If you want to consider this as a business just like with any other business this is what you have to do. You cannot just say I am "at peace with what I get" .how do u know if you could or should be getting more? Exits are something totally different: They are determined by your set up/ edge/market advantage whatever you want to call it. So gaps will have a different target to scalps which will have different targets to squeezes. Part of the problem people have with exits is that they don't even know what kind of trade they are in...is it a position trade as part of a secular market movement...is it a retracement..is it movement in a channel etc? In any case the actual points target is no where near as important as the exit strategy. As u know I favour the 123 appoach ..sell one third to cover all costs and lock in a small profit...sell the other third when the set up target is reached eg the gap is almost closed and let the third run (while trailing the stop up). So there can be no thing like an average exit...this is nonsense...this is just floundering along. Knowing your exit based on the kind of trade you are entering before you even enter a trade is trading. Be happy enjoy your life?......yes of course that's what we all want. I know I am only happy if I know that I can make my targets repeatedly and increase them over time. That makes me very happy ...

[Galuc]

Thanks john, very interesting perspective to trading, I have a lot to learn yet!

[#3]

John do you only trade for a living?

[HateGauteng]

Nice one, I've moved back to KZN and looking at trading for a living.

[jack12]

back in the Shark Tank?

[HateGauteng]

Yep and I'm eating well!

[john_1]

this was chartist response. No I don't only trade for a living, I am finding this market quite testing to be honest. I am stugling a little as I am still heavily biased to the down side.

[Ninja]

The real question is John do you or could you trade for a living. If your answer is no is there anyone on this forum that trades for a living successfully?

[john_1]

I lived off my trading for nearly 3 years suplemented with a small income from another business.. sometimes its been great.. sometimes its been really really tough. the last 8 months I have been working full time on a project that started as reaserch in the market but has become so much bigger so for 8 months I have basically worked without an income which because of my last years trading was fine... but to be honest I am feeling the preasure to earn again. Which is why when I saw some weakness in the last two weeks I traded it. I have never achieved a daily consistant income... My one most desired goal...like some day traders I know my to my envy (chartist inculded )and as such I realize that I have much to learn...

[Ninja]

John, thanks for your straight reply. It is slightly daunting however. My goal, as is yours, is to achive a consistent daily return. I am finding it to be a huge challenge. Perhaps there are no traders on this site that pay their way by trading alone, a terrifying proposition but one we need to face. Is this really an option?

[#11]

The problem I think exists in the fact that if any member decalred they were "official" day traders and did only that for a living they would be inundated with questions etc from everyone asking how to do this and how to do that. I admit if I knew more full time traders I would be asking alot more questions and if I were a full time trader I would avoid making it known due to the facts above.

Please dont get me wrong there is nothing problematic in wanting to help a person learn more but you have to choose who to help and who will be along for the "free ride" at your expense and effort. That I believe is what most traders avoid in not making it known. Would the "free ride" crowd really want to learn anything and what would they learn? Is it not easier to just take advise and follow the traders moves/system and make money? Problem is my targets/stratergies and systems might not be what this or that ones expecting so they will be more "hassel" and hinderous than benneficial. What happens when I start to loose money cause I decided to take a gigantic risk for reward and the "free rise crowd" floows suite, will they be angry at me or them selves for not learning?

Guess thats why half decent (and maybe not so half decent) traders start their own companies/web portals. "You want my advise pay for it and I will guide you but I will not guarantee you a system that works 100% for you."

Then again the really great traders are the guys that watch silly posts like this and nod their heads in agreement that they still hold the upper hand, quite as a mouse and lethal as a viper. But they make big money from our presumptions and they sit laughing at days end. OMO

[SimonPB]

CPS, the problem isn't even so much that people will ask too many questions .. rather is that they want "tips" as to when/what to buy/sell and they never put in the effort .. pretty much they just want somebody to write them out a cheque .. trading like everything else requires learning and a skills set .. and like everything else people want the short cuts ..

[#13]

Hi Simon, I think the main topic in this thread, is whether a trader can get consistent enough signals in his/her system to be able to earn a consistent income stream. This is why I don't do it full time - I know I make decent returns, but I don't trust the frequency of my entries, and most importantly, I know that if i suddently have to put bread on the table, then it takes trading discipline to a whole new level, because you will now not only be tempted to trade outside of a system, but possibly be forced by circumstance.

[Ninja]

My question still stands and as anyone on this forum knows | am no free rider. I have studied hard and work for about 4 hours per day after my day job on trading. I make my own calls and stand by my decisions as this is the only way to reach financial independance. John and Chartist are two of the most respected traders on this and other forums. Both have years of experience and are no doubt skilled traders. Both are however finding this tough and relying on more conventional income streams to pay the bills. Simon, I presume you draw some kind of an income from standard bank. Even the mighty who publish weekly advice letters (Eg Colin Abrams)get paid for doing so and so generate non trading related income. My question still stands, how many people are actually living the life of freedom as a full time trader where all their financial needs are met by trading alone. I wish this forum was filled with such people as it would fill me with hope, however it appears this is more elusive than many realise. John I wish you all the success possible, your posts are always honoust and insiteful. Simon, on another point altogether will OST ever hold live trading workshops where strategies and principles can be demonstrated on live markets. What about a strategy page on the website that demonstrates concepts such as breakouts, gap closes etc and where traders could comment on their findings and other strategies on old or live charts. I am not interested in free tips, however a more interactive website / trading room might be of real interest to the more serious traders on this forum. Oh, and Simon thanks for a great trading site and forum......I look forward to whats comming down the line.

[john_1]

I would hardly consider myself good let alone respected. Nija.. my strength is in stratergy my weekness...from a day trading perspective I am not mentally flexable enough...and as such either spend to much time looking for a trend change or stick with the trend even when its turning...

[richardw]

Ninja - I'm not sure why really top traders would hang around here, long-term. Assuming they wanted to share, my guess is that they'd be more likely to have a quiet mailing list going somewhere, with a higher signal-to-noise ratio. The Schumachers of the world probably don't want to trade amongst the taxi-rank that is us :)

Having said that, I quite like reading blogs like Zero Hedge specifically because they have a bit of an insider feel and you get posts from some smart people. Guys working at hedge funds, investment banks, fixed-income funds etc. There's also a fair share of loons commenting, but that'll happen on anything public.

[#17]

Simon, Ninja, John - I agree with all this. SImon Yes the free loaders always want tips and "easy money" so thats why I think most good traders hide the fact. Nija, I like your approach and I learn the same way so we will rise together in the commin years. With John's experience and advise and other really good occasional posters I am sure we could maintain and upgrade the value of this forum over time....

[john_1]

stop blowing smoke up my a$$....if you want to learn go speak to chartist or guys who pull money out of the market at will. If you find them please send me the link.

[divz]

Ninja you say both are finding it hard ie john and chartist. john obviously speaks for himself but are you assuming chartist is finding it hard? or do you speak to chartist?

[#20]

Dont be so modest John, Your insight has been very valuable in the past. I would say most of your posts are more or less spot-on. We all have bad days and we all have good days. Skaap, Wiz, Saash, Prancing H and others I cannot remember right now also blow in here every so often and add as good advise so you are not singled out, but you do post regullry that makes you the resident guru IMO (we cannot take Simon into account as he has to be nanny at the same time - even though he has excellent advise) so us younger learnng crowd has to follow someone. Lead by example and not by words and John your examples WORK!!! I am not trying to butter you up, I have a spouse to talk too so yours is a forum friendship and thats it.