What are various forex trading exit strategies exist

(Last Updated On: August 24, 2017)

What are various forex trading exit strategies exist

This was posted on my various Facebook outlets

Who is interested in sharing their exit position strategy? What technical analysis indicators do you use? I hear MACD and RSI is most popular combo. I know there is a possibility of using a standard deviation in normal distribution stats as well some form of correlation between convergence/divergence of 2 asset relationship. Let me know if you can with your parameters well. Big thanks

Here are the various answers:

In my experience, using indicators only delays your entry and exits. Personally, I use only Bollinger Bands and that’s all you need but I’ll keep the rest of my strategy a secret if I may!! (still finalising it actually).
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Can use a ATR stop loss. 1.5 -2 ATR. Some use SAR too.
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Can also consider to use swing lows to exit
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Hey Bryan, in my experience , RSI and MACDs (I only use those 2) are only supplementary. I use the best indicator of all: price. Price action is the best . The rest are price’s derivatives. In a nutshell, I use price patterns, trend-lines, horizontal and diagonals. And if it applies I use Fibonacci levels (0.618 and 0.382, +1) . I hope it helps
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As Collin says ATR are good for stop loss or profit taking if you r a day trader . Trading in general depends on your trader’s profile
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I use stochastics if I believe it is a “range market” and if price is forming a range
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This is the Crude chart: https://stocktwits.com/IsaacFigueroa/message/92924489

 

$USOIL Crude is playing with us again (overfollowed) $DWT $UWT $ERX. TA can save you headaches $USO
STOCKTWITS.COM
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And this is a simple strategy for swing trading https://stocktwits.com/IsaacFigueroa/message/92939592

IsaacFigueroa shared an idea on StockTwits
@bertrandmth Bullish: 51.5 -52 . Bearish: 43.5 – 44. I have no position, I will wait for tomorrow @10:30 am
STOCKTWITS.COM
For stop loss standard deviation or ATR. Profit target depends on the strategy objective.
RSI + price and rumours/facts seems to work OK with Crypto…. For an amateur.
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I would be very sceptical about RSI used as an exit strategy because the RSI is a momentum indicator, and why to exit when the market gains a momentum? On the other hand exiting when RSI losses the momentum could be a way to go, BUT RSI is logarithmically scaled indicator so any small retracement in price will look as a huge slowing down of a RSI momentum -> and why to exit just because of a small retracement in price? big nono.

I did exactly what your second paragraph says in my Bachelors work. StdDev and two currency pairs correlation. The problem is that the returns are not normally distributed and so during the summer holidays, a 2 sigma worked best, but during U.S. election the 3 sigma performed best at backtests. If you can predict the volatility, you can then adjust those parameters, but I can’t predict that :/ I tried to use the Hurst Coefficient as it seemed most reasonable to adjust the x-sigma exit strategy and the results were a way better.

Anyway, always the best exit strategy was the ISSL which stands for Industry Standard Stop Loss, for more information visit http://www.forexmospherians.com, it is all there 🙂 Hope it helps man.
http://www.forexmospherians.com/

NOTE I now post my TRADING ALERTS into my personal FACEBOOK ACCOUNT and TWITTER. Don't worry as I don't post stupid cat videos or what I eat!
About The Author

caustic

Hi i there My name is Bryan Downing. I am part of a company called QuantLabs.Net This is specifically a company with a high profile blog about technology, trading, financial, investment, quant, etc. It posts things on how to do job interviews with large companies like Morgan Stanley, Bloomberg, Citibank, and IBM. It also posts different unique tips and tricks on Java, C++, or C programming. It posts about different techniques in learning about Matlab and building models or strategies. There is a lot here if you are into venturing into the financial world like quant or technical analysis. It also discusses the future generation of trading and programming Specialties: C++, Java, C#, Matlab, quant, models, strategies, technical analysis, linux, windows P.S. I have been known to be the worst typist. Do not be offended by it as I like to bang stuff out and put priorty of what I do over typing. Maybe one day I can get a full time copy editor to help out. Do note I prefer videos as they are much easier to produce so check out my many video at youtube.com/quantlabs