Exits (9-21-2010)

My ISP conked out sometime during the morning session today and didn't come back up until 2:30. I was in 4 positions when I lost service so I re-set the sim account prior to trading the afternoon. Trading went so-so, and rather than post the afternoon's trades I thought I would take some time to figure out an exit strategy.

I took snapshots of all the stocks I was watching today, marked triangles or new H/L and then marked prime - the best possible exit from the entry signal - exit locations (blue dots). (I can't say for sure how I traded them this morning, but I am assuming I saw something of interest or it wouldn't be on the list.) I also marked what I thought could possibly be called strength in terms of bar length and the prior current day activity (red diamond); these would mark places that I might have considered getting out at (if my trading world was perfect). The exercise here is to try and come up with a common exit theme, something I can use for visualization.

I didn't think about this before I am writing it - I am using the journal to collect my thoughts and form an opinion.

Charts

ABX

The only thing I can see on here is the 'biggish' candle and the action around the even dollar mark ($45.00). The red diamonds both mark candles that approximately match the prime exit, with the second one ending at $45.03. The way I trade, I can see myself holding thru that candle, then getting nervous on the following green action and likely exiting into the weakness (but we are only talking pennies here). Still - even after the prime exit, there is plenty of stall and time to get out around the $45.00 mark:

ADS

Nothing again here to signal the exit here except the relatively large candle and the even dollar ($63.00). The 15 minute provides a nice doji using the prime exit candle. Again, I notice plenty of time to get out, no need to exit into the weakness:

ATHR

Not much here either. The 15 offers a long top side wick using the prime exit, and again, there is at least one 5 minute candle after the 15 minute signals the wick. The diamond marks the largest candle of the day and wouldn't of been that bad of an exit. (Let's not talk about my afternoon trade):

BAX

Nothing happening here. No movement and no exit signal:

CCL

Here we have a short and later a long. The only thing marking the short exit was the relatively large candle prior to the prime exit stopping on the even dollar ($37.00). No signal on the 15. The long would of been a messy trade and likely would of been stopped on the FED action, probably not a good visualization candidate:

CTSH

Relatively large candle on the even dollar again ($63.00). The prime is also marked with very high volumes. The 15 uses the prime exit to show some wick on the bottom end, but every exit would be into weakness after the 15 forms - until the 2:15, but then we are etting back into FED action:

EW

Even dollar amount ($60.00), following the relatively large move after the breakout. Plenty of time to exit (not sure how I traded the morning, but the afternoon was based on the new high - hindsight says to check how close the entry is to an even dollar amount, especially because the prior candle was so large...):

FCX

Two signals, short and long. Wow... on the short - for like the umpteenth time today, the prime exit is located on the large candle... that ends on the even dollar ($81.00). Plenty of time. Going to ignore the long because of the FED, but it looks like the $83.00 covers that first big candle:

HS

I can't find a signal on this one, except perhaps the prime exit being used for topside wick action on the 15. This should probably be chalked as a fail:

IPI

I am not sure how I traded this one, but I was watching it this morning. The afternoon trade is into the FED, so probably not a good candidate... except for the fact that the stall is once again around the even dollar ($27.00). Definitely something to note:

JOBS

Ok... this is starting to get a little obnoxious... prime exit on the even dollar ($37.00). The 15 uses the prime exit for the doji, and... I would say that there is not time to exit, with the $0.30 drop immediately after the doji. Interestingly enough, the price action stalled around the $36.00 mark as well:

LLTC

Nothing to mark the exit here. The 15 uses the prime exit to form the bottom side wick, but goes up for the next 3 candles. But - there is time to get close to the prime exit, with the double bottom forming (as Fozz pointed out earlier today). With some imagination, the 15 signals weakness, and the 5's offer a chance to get out on the double bottom. Not a bad plan:

MDR

Nothing much here - the two candles preceding the prime exit are both strong, and the case could be made that there is time after the strength to get out - no need to cover in weakness - the prime exit failing to break the prior high after the show of strength? I would probably of exited on the first big candle (I didn't mark this for some reason). This move is only $0.30 so not big call:

NTAP

Prime exit: big candle, big volume, even dollar. Plenty of time. 15 min doji (I think I am starting to smell a theme here):

PNC

Prime exit: large candle on the 5, even dollar, 15 dojis, plenty of time - in fact profitable to wait:

PSA

I don't see anything on the prime, except that the 15 uses it for topside wick, but that runs into the stop - definitely a fail. But again - worthy of notice - the FED hovers at the even dollar, and then it happens again on the way back down:

PX

Sloppy mess - but I was watching it (can't recall if I traded in the morning). Prime exit is on the FED. Red diamonds on big candles, with one ending within $0.02 of the even dollar. I am going to say that the entry candle was probably the best exit - but this is not a good visualization candidate:

SNDK

Not much to find here. 15 uses the prime for bottom side wick, but too easy to cover into weakness. If a guy were to hold, there is some opportunity later to sell, but the long wick on the 15 should be heeded and the first strong in direction move should be capitalized on:

TIP

No prime signals except EOD. The even dollar seems to offer some support on the top side. Notice - no long wicks on the 15's, except maybe the 3:45:

Conclusion

Well - without going back over this (I don't have the time right now, but will find the time before tomorrow) I would call some basic rules:

1. Always cover in strength. Wait for it.
2. Watch for and cover in large candles on an even dollar.
3. Watch for and cover in the largest direction candle of the day.
4. If 15 shows wicks, look for the first 'strong-ish' opportunity (in trade direction) to cover.
5. Otherwise, wait for the stop.

Sounds doable.

Feel free to offer some feedback.