The financing Exit

Please refer first to the basics of the quad exit to see the following post in context to this macro exit structure.

The financing exit is mainly there to eliminate risk based on the action-reaction principle:

Newton's third law states that when two bodies interact, they apply forces to one another that are equal in magnitude and opposite in direction.

And on equal importance, it is a tool to get the trader into a winning mindset, allowing for proper exit management on the remainder exit spot.

Proper trade management and efficient execution are nearly impossible without this part of the quad exit.

The following top-down principle-based rule regimen determines the timing of this exit.

First and foremost, all trade planning, analysis, evaluation, and selection needs to be made before entry!

This is based on the principle that one can not correctly execute a trade with an analytical mindset since the execution mindset, which follows the rules, is directly opposite to an evaluation mindset.

!.Make a fundamental monthly and longer-term analysis of portfolio components and execution of conducive trading instruments to limit the overall basket of tradeable markets.

2.Further restrict trade frequency and trade direction through a "weekly call" to not be sucked into a shorter term trade selection within the week, for overall risk control and mental prep on which instruments in which time frames to focus on in during the upcoming week.

3.Systematically prep for the upcoming trading session with a "daily call" analysis that eliminates losing streaks and reduces exposure risk.

4.Stick tightly to your rules of what specific trade types, position sizes, time frame setups, and so forth are within your toolbox for executable trades for the upcoming trading session.

5.Scan the market for the early signs of possible setups to manifest(for example, the left part of a double bottom low in a long trade hunting environment) and determine if sensible risk zones apply to the trade's validity concerning possible exit zones. All exits need to be evaluated and marked before entry to see if a trade has appropriate risk-reward ratios and overall logical sense for your given risk parameters.

Once the macrostructure is in place, there are additional components that will be responsible for the timing of your financing exits:

1. time frame (what is the largest time frame that has the momentum bounce?)

2. trend(was it washout, possible larger turning point, trend continuation trade, reload?)

3. strength(percentage move in relation to MAE and time)

4. time of day/week/month (abnormalities like exchange open/close)

5. type(surprise, announced news, FED announcement)

6. trading instrument specifics (normal/unusual)

7. reading the tape(for small time frame scalps, FED announcement, triple/quadruple witch, six sigma and alike)

Stay Up-To-Date with New Posts

Search By Tags