Setups (and triggers) are talked about quite a bit in forums and in personal conversations with traders. Rarely do I hear people talk about exits. Everyone has their own take but I believe it is the exits that are the most important part of a trade. How you manage exits will be the deciding factor on your potential for trading success.

2. Over the years you hear many
trading ism's that many times are
hard to follow. Think of
"riding the trend until it bends"
and you will know what I mean.

3. How many of you have been
on the winning side of
huge moves only to exit
and book the "gift" the market
gave you?
…but the move continues without you

4. I know sometimes I have spent my
paper winning before I have booked
them.
That was more of an issue starting out
in trading until I quickly realized to
much dreaming can be costly.

5. Now, it is simply dumping the money
right back into the trading account.
Yes, things get easier as time goes on.

6. Let's look at another "isim" that I am
particularly fond of:
"Know where you will get
out before you get in."
Setups (and triggers) are talked about
quite a bit in forums and in personal
conversations with traders.

7. Rarely do I hear people talk about exits.
Everyone has their own take but I
believe it is the
exits that are the most
important part of a trade.

8. How you manage exits will be the
deciding factor on your potential for
trading success.

9. Without a defined exit, your loss will
quickly become painful to your
account and on the flip side, how do
you know when to stop giving back
profits?

10. Ever been in a trade that was in profit
and then seen it turn negative?
I have.

11. Ever sat there hoping the price would
return in your favor?
I have.

12. Ever taken a much greater loss than
you initially planned on?
I have.

13. Ever jumped out of a trade because of the
"profit itch" only to see bigger moves?
I have.

14. Exits must be defined in your trade
plan. The only way to define
your risk is to have a
point where you will exit the trade.
Think of yourself as a risk manager.

15. Let's take a simple Forex example.
$5000 trading account x 2% risk = $100
dollar risk on any trade

16. If you know you can risk $100, you
must know what the maximum
adverse price move can be before you
hit that amount.

17. Knowing your exit will allow you to
understand how many contracts and
size of contract (micro, mini, standard)
you can buy to limit your risk to your
defined risk tolerance.

18. If you are the type of person who
needs absolute control over every
detail (Control Freak), skip trading as a
career choice.

19. You must be able to accept the
following if you have any hope of
achieving any level of trading success:

20. You can control your entry.
You can control your exit.
You can control your risk via your exit.
Everything else is out of your hands.

21. Once you have placed a trade, the
market will do whatever it will do.
That, is a certainty. All you can do is
define your exit strategy to either reap
the rewards or limit your risk.

22. It does not have to be complicated.
Trail a moving average.
Take profit at a zone of support/resistance.
Exit when price patterns indicate a reversal
(higher highs and lows reverse).
Exit partial at 1x your risk amount.
Exit when a momentum oscillator is showing a
turn in interest.

23. Far too many accounts have been
wiped out because the owner did not
take exits seriously.
They gambled and they lost.

24. Save that for Vegas but in trading,
be a professional, act like a
professional and perhaps you will
only need trading to support your
lifestyle in the near future.