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Originally Posted by dr_sean
great advice wolf!
I have a question for you:
do you like to scale in to and out of positions, or do you typically have one set entry point?
Thanks,
Sean
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I set all my entries, exits and stops based on Technical Analysis--sometimes its scaled and sometimes its not...but each entry, exit and stop has a technical reason usually...but sometimes it can depends on the trade and when I find it too.. Overall I try to look for a decent price which I feel is a smart buy or sell price for the move(s) I expect to see happen....not neccesarily a price solely based on support or resistance. If I believe a price will move up before it moves down--I will target a middle ground between where it is and where it probably will touch before a reverse.. But I don't like to look at the numbers moreso as a price--I like to look at the trade and how the chart looks for pattern or position and move--not make a decision based only on a price alone...
Exit is where I may scale a bit more... Often times I will shoot slightly above or below a support or resistance area...because I feel for that trade its more of a sureity that it will make that mark rather than "maybe" making it to the technical one.. Take numbers and psychology into deep consideration...folks respond and think about prices in round numbers--0's, 5 and 9's....so I try to make my targets just at or around those points in a Support or Resistance area...its Numbers and Psychology....
Numbers and psychology--check this out: What sounds wierder to you in a store--paying $1.92 or $1.99 for an identical item?? $1.92 may cost you a round $2.00 with tax--and be lesser money...while $1.99 may cost you $2.07 with tax... But most folks given a choice will go for the identical $1.99 item--cause it seems more 'normal' to them. WHY? Its what society has conditioned folks to think for in 'prices'--in certain rounded numbers. Same in Forex and trading--when folks like institutions and banks and other HUMAN traders set prices for exits and stuff--they look at the round numbers they feel comfy with--and those numbers are very often achieved, and they involve a 0, 5 or 9. How many times do you look at the high and low of a day and always see a 2 3 4 or 6 7 8 as the high or low for the day? Not very often--most times you wil see a 0, 9 or 5 as part of that number...there is a reason for this..traders are humans.
For example: If resistance is at 100 and a price climbs from 76 and makes it 90..and to 95...then a trip to 99 may be easy--but actually broaching 100 is slightly harder step into for get beyond...and 105 is a pipe dream....so depending on how it dances around those numbers--I will target 90, 95-99 for a price exit and forget about 100 or higher. If a price falls and hits 100 support, then going to 99 is gonna be tough--but if it does bust thru to 99--then 95 is not such a stretch and is easier...but 90 may be difficult unless its got a good amount of volume with it...and so on... You just have to determine where in that area of support or resistance you want to play the numbers game... Think about the above example--and how you would feel about those prices and numbers as targets...
The psychology of numbers and prices can really help when planning exit targets and its very interesting..a must know to keep in the back of your head for traders IMO...
Remember--The goal is not to get every pip possible--its to get out with a profit and not a loss--or at least have a well managed profit or a limited loss...
-w
Your favorite time to trade
.....until I get super excited and end up staying up all nite to watch a trade that just executed or that has been floundering all week and finally hits the entry or target...
