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Exit Signals

By jaguar1637 3363 days ago Comments (24)

Hi

Which are the best EXIT signals ?

Are they related to some chart/period features ?

Please, tell me more

Comments

  • JohnLast 3363 days ago

    You can check my last post in the oandian orders discussion. You can see how my neural net generated signal went wrong.

    So basically there are many questions within the questions:

    stop loss exit: you would know when your plan is no longer valid, some even add a time limit (as the market is chaotic and the more and more time passes the information you based your decision is loosing power)

    It is very hard to even try to answer that question.

    take profit exit:

    Here I have some ideas that I shared.

  • JohnLast 3363 days ago

    As a rule of tumb you would better cut the losses short, however this is a principle only for directional systems:

    -that may be a stop loss level

    -that may be a contrarian signal from your system (In the brain trend system I use a contrarian signal as a signal to exit and not a fixed stop loss level, but it is possible to combine them, personnaly I am looking for simplicity)

     

    Other systems may have a complete different answer to that question.

    You are using a specific system where you are dealing with the risk in another way.

    For example a long accumulation system. When the things g owrong you just change your time horizon. 

    And you have a special algorythm to scale in and out. 

  • jaguar1637 3363 days ago

    yes

    the Fractals bands provide Entry signals, but for fetching exit signbals, this should be deeper investigated. Stop loss is just in case of. in my humble opinion, Stop losses shlould be never reached

     

     

  • Jack1 3362 days ago

    hi,

    This indicator ( BB on RSI ) can be used for a good exit signal.

    RSI hit upper bb line, if rsi can stay above 70 line, then, momentum is still strong. But, watch, rsi is rejected at BB, then, drop below 70, then, price hit higher rsistance, exit, or setup trailing stoploss below current bar to exit.

    If RSI hit BB, then, drop off 70 line, then, drop off 50 line, then, a hard cut-off stoploss exit.

    You can modify this indicator, add exit signal on indicator. But, watching it for few days to figure out how to do, or rules.

    The theory behind this exit signal is the momentum often lead ahead price. If momentum loss happen, then, you can take out profit and ready for exit, Game is near to end.

     

  • JohnLast 3362 days ago

    If we are talking about directionnal system I think the idea of the stop loss is to prevent the major loss.

    The stop loss means that if it is hit the scenario you are planning is no longer valid and you would be better out of the game.

    So basically it is about a projection of volatility. I would show you what happened with me today.

    I wanted to go for the downswing but I was stopped. That was nasty but the stop protected be from a bigger loss. My neural nets cannot predict that kind of things. I may say that this was engeneered move with the only idea to activate the sell orders at those levels. 

    For me the market is perturbed right now, so I will not enter any more, I prefer whan the market is in a normal state. Any attempt to revenge finishes normally bad. 

     

    image
    От Technical Analysis

     

     

  • JohnLast 3362 days ago

    I think that one of the best RSI based systems is the Synergy system. The trader's dynamics index is based on RSI.

  • jaguar1637 3361 days ago

    Jack,

    Which BB do you prefer BB (2.0) or BB (2.2) ?

     I noticed Fractals bands are quite good as entry signals.  do you think Fractals Bands can be used instead BB ?

  • Jack1 3361 days ago

    Jaguar, 

    Use 2.0 as standard devia.

  • Jack1 3361 days ago

    John,

    Yestersday's eur-usd intraday price move is quite often in fx. This type of price movement has massive killing power to swip out trader's advanced EA, trading systems, HFT trading system. So, when you heard anyboday boast their EA or auto-tradingsystem or advanced math system, then, you can laugh out for a bit, know they are not winner in fx. 

    Market makers never scare your advanced (hi-tech) trading system, they can make a irregular price move to do a killing_all clean_market manipulation. This is why fx market make traders to be losser.

    Traders or their trading system, indicators, nn, ..., etc.  can see  ocean surface waves, but, they can't see irregular motions of under sustained wind wave below ocean surface wave. This type of wind wave are killing wave. Do you know why Elliott wave theory and their counting often fail in practice fx trading? Elliott Theory may be a pseudo-theory in some way, I believe definitely.

    On Daily, H4, H1 charts, you may can view surface wave in some degree, but, that real killing wave can't be catched or to be forecasted in intraday chart, could be?

    There is a link for deep study this issue. http://en.wikipedia.org/wiki/Wind_wave

    There is a ocean black hole near South Africa coast. Some huge boats disapeared in black hole there. Someboday believe the under sustained wind wave below ocean surface wave

  • Jack1 3361 days ago

    There is a ocean black hole near South Africa coast. Some huge boats disapeared in black hole there. Someboday believe the under sustained wind wave below ocean surface wave

  • Jack1 3361 days ago

    Any Black hole in fx market ? or !

  • JohnLast 3361 days ago

    Interesting, you can acreate an alternative theory of the waves, in fact you are limited only by the imagination.

    Elliott wave theory is usefull for the classification of the market states (I think so). As the market has memory it is likely that the market states are going to last for a while. For me that is the hidden wisdom in that theory, as classification theory of market states.

    All the claims that the market is going to repeat in deterministic patterns is not serious. Repeatable Patterns do exist but their true nature is still a mystery. Some modern authors specialists in EW theory like Miner, allows them to say that the market is not following EW pattern most of the time, and insist in not insiting to fit the market into a deterministic frame. 

    The question about the market states  is, if they are going to last enough to profit from them.

    /A neural net, it does not give you probability of any kind, it just tells you that if the patterns remain the same that is the most likeley continuation./

    I wrote a blog post some day ago asking myself if the technical analysis stll holds. 

    For example look the market before the .com crash. The Elliott wave was perfect, the Dow theory is perfect, the Portfolio theory was perfect. 

    All those theories were working, BECAUSE the market was GROWING and staying in the market was paying for. 

    Now there are many that are scared to stay in the market because it is scary. 

    And I think that from a fundamental perspective there is nothing that would allow futher fundamental growth (over the peaks we historically had) in the Dow Jones. The market cannot go up forever because there are big crisis the humanity faces: 

    -energy crisis (over-use by the rich nations of the ressources)

    -ecological crisis

    -social crisis (overpopulation and poverty)

    The question is, if the humanity is going to survive?

    All the current crisis by hitting the markets and producing economical crisis helps us to slow down, to ask questions, to get aware. If there is not crisis the public opinion will not be aware of the problems, and that means there would be no political demand and nothing will happen. The problem with the baloons is that they are difficult (impossible) to predict how much they are going to last. The real estate baloons may have last much more. 

     

  • jaguar1637 3361 days ago

     

     

    Very good , BB (2.0) 

    So, for Fractals_bands , you did not disagree

    About RSI, I am found of the RSIOMA. What do you think about it ? Do you think it's better than the original one (RSI), for exit signals ?

    • RSIOMA (default = 14) — the period of the RSI and the moving averages that are used to calculate the RSI. Increase for smoothness, decrease for signal frequency.
    • RSIOMA_MODE (default = MODE_EMA) — mode of the moving averages used for RSI.
    • RSIOMA_PRICE (default = PRICE_CLOSE) — price levels used to calculate moving averages that are used for RSI.
    • Ma_RSIOMA (default = 21) — the period of the moving average of the RSI.
    • Ma_RSIOMA_MODE (default = MODE_EMA) — the mode of the moving average of the RSI.

    Also, for both of you, did you noticed that point


    if EURCHF oversold = BUY EURCHF, SELL EURUSD, SELL USDCHF
    if EURCHF overbought = SELL EURCHF, BUY EURUSD, BUY USDCHF

  • Jack1 3361 days ago

    eur-chf is not oversold, down to 1.1300  if you believe intervention won't last for too long.  In 2/3 odd, range or down trend will down to 1.000. Only, up trend, 1/3 odd. But, up trend failed with many test the top level.  

  • Jack1 3361 days ago

    BB(20,2) on RSI(14) or BB(20,2) on RSI(10).  BB got ma(20), so, it is ok, no need of complexity.

  • jaguar1637 3358 days ago

    To exit or not. That's the question !   lol ;)

  • JohnLast 3357 days ago

    I think hat knowing where to exit is as important as knowing where to exit. And it is very difficult sometines to optimize the exit strategy.

    In fact the exit strategy is much revealing for the characteristics of the system itself. There are some profitable systems that even are using random entries. 

    So my ideas here on this forum are that the market state analyses is giving us some clues for the exit strategy.

    As for the take profit strategy I think that is a bit unnoticed but it is critical. So imagine youare correct and your position is turning to be profitable and the market is going into your direction. Imagine you are +20 pips.

    What are you going to do, close the deal and pocket the pips immediately or you are going to wait 10 more pips because right there there is an accumulation of orders that are likely to be targeted.

    So  you pocket 10 more pips without any bi increase of risks.

    On the other hand, imagine you had 20 pips, but you analysis suggest that the market can go much further. However you see that the market has just hit an important accumulation of orders. You would better close the position because the market may correct after the distribution of orders between the masses and the market makers.

    Here is a trending market. In a trending market my experience sofar is that the market orders are giving us a critical piece of information about the exits: both take profit and stop losses.

    Here imaginge you are buying look at the first arrow, it was giving the level where there would be a resistence. 

    As for the risks look at the blue levels below the price it is the buying accumulation, there would be the stop loss level, right below it. And as it goes up you can change the levels accordingly. 

     

    image
    От Oanda open orders

     

  • jaguar1637 3357 days ago

    In my humble opinion, knowing where to exit, is much more important than knowing where to enter.

    because, you can enter at top-bottom break-out given by stochastic, CCI, FGDI, BB, VQ and so one

    but those indicators are not so powerful to show an immediate exit, before reaching stop loss. For me, reaching stop-loss means a failure from trading algorithm

     

  • Jack1 3357 days ago

    John Last,

    You do a wonderful research on the order book. The state of Order book represent some traders trading strategy. Retail trader often be wrong on their entry, which can be viewed through order book.

    Big guys play market to form a price pattern to feed retail traders, waiting for their entry orders. Then, they run the market monster to crash, smash these orders. Euro sell order cluster on 7-2-2012

  • JohnLast 3357 days ago

    What I can say that is the decision output of the ratailers, I could say that it is the mass psychology. If the orders were normally distributed that would mean that the people are putting their proders at random places. 

    But you can observe clusters at specific levels. So it is not random, but it does not means that it is easily predictable either. 

    Really I like the terminology used, clusters, nice one Jack1.

     

     

  • jaguar1637 3356 days ago

    Well, is there any indicator able to fetch parameter's clusters ?

  • Jack1 3356 days ago

    yes, see my upload files.

  • Jack1 3356 days ago

    market profile indicator say the cluster of price activity on level. 

  • Jack1 3356 days ago

    market profile indicator say the cluster of price activity on level.