Trading Maturity Quiz!

[Winston]

Here's a really fun quiz!

Everyone is encouraged to try it out.

What is the most important difference between the point (1) exit and the point (2) exit?

* Assuming I took a Long trade at the bottom of the move.

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Anyone game enough to try? You are free to reply and post your theories here!

If you can explain this theory, PLUS execute it in real life. You are set to be a profitable trader for life.

You can skip all trading classes, and just keep to your pattern, you'll sure make it.

good luck!

have fun,


winston

[szehao]

Firstly I would choose to exit at point 2.

Exiting at point 1 don't seem here or there. The candlestick body was relatively long and was an upclose. Tells me a strong upwards momentum. I wouldn't want to take myself out of the mkt when momentum in my trade direction is so strong.
I don't know what FULL indicator is what kind of indicator but from the chart I assume its something like an Stochastics oscillator. Pt 1 was at the peak of the overbought however no signs of a reversal yet. If i was at pt 1, I probably conclude that there might be a chance the mkt still become more overbought.

In point 2, its a move in the reverse direction of my trade and the candlestick body was full with little price rejections. Probably hints that mkt is going to move in the other direction. ANd when i refer to the oscillator, i realise that it has fall from its overbought peak. Tells me time to go short.
So point 2 is my preferred exit position.

[kaden]

I would choose exit 2.

For exit 2, the MACD is flattening out and the Stochastics is showing a u-turn and it means that there is going to be a change in trend.

For exit 1, it is still on the uptrend and the MACD and Stochastics does not show a change in trend. It means that you sold too early, because the trend may go further up.

regards
Kaden

[Winston]

hahhaha anyone with more interesting responses?

[synwind]

Exit (1) is the best exit as you are trading counter trend (it looks like current trend is bear) and you want to take quick profit. You will be looking to exit when price near upper Bollinger band and/or other indicators shows it overbought or has somewhat has peak.

You won't want to wait for it to turn like exit (2), cos the down candle might be quite big and worst of all to have taken out most of your profits.
I think exit (2) is use only when you are trading with the trend.

what do you think of my view?

[Winston]

i like your reply. very interesting point of view synwind. very interesting

discuss with you when i see you.. hahah.. so that people can carry on posting theories here.

cheers,


winston

[synwind]

hahaha.. personally, i have stop waiting for market to turn to exit. i usually has a target profit in mind (like your exit 1).

I have asked you a question before when i first met you in the "intro class". My questions was, do i hold up a position all the way till change trend or just take smaller profit along the way up.
Your advise is to take the smaller profit cos no one know when the trend will change. (see i remember what you said by hard )

Therefore, i always set where my stop and target profit before i enter any position. i am not too worry i set my target too low... cos if it is trend, i will always have another chance.

i read somewhere where someone once said; "When you trade with the trend, you can only loss one time. At the top or the bottom of the trend" This advise is Golden man!!!

i like your reply. very interesting point of view synwind. very interesting

discuss with you when i see you.. hahah.. so that people can carry on posting theories here.

cheers,


winston

[Winston]

beautifully said!!!!!!! =)

[Winston]

i think i would give some clues for anyone who wants to add to this thread... so far, the 3 responses are very well said!

.. and all 3 are correct.... its not exactly (1) or (2) that matters.

It is the thought process behind how you got it. Notice synwind introduced the concept of counter-trend.

This chart print is not enough to tell counter or not, but knowing it is good enough, so that you know the circumstances that lead up to your decision.

I know these 3 will be great traders!

cheers,


winston

[splaw]

Hi,

I would sell when it break the steep trendline drawn by connecting the lows of the bars to the downside. Since the chart is 5min bar, I will look at 1 min candlestick chart for trend reversal at bar two. Look for lower highs and lower low using elliot wave method on 1 min chart.
This is just another opinion.

SP Law