Context:
The trade idea:
The entry:
Out:
How I think on trade exit:
All exits are temporary.
Pause and reassess.
Consider re-entry if the premise remains valid.
Sometimes it takes two entries. Sometimes it takes three.
There are no ways around this.
In the uncertainty of market action it's unreasonable to expect that we will always get a perfect entry.
So we're left with two options. Either we spread the entry via multiple parts across a general entry "area". Or we try for all-in precision but accept the fact that sometimes we'll need two or even three attempts to catch the move.
Although I sometimes trade the first method, my preference is for the second. All-in entries, accepting that it may take multiple attempts.
All exits are temporary. Pause and reassess. Consider re-entry if the premise remains valid.
Happy trading,
Lance Beggs
“In the uncertainty of market action it’s unreasonable to expect that we will always get a perfect entry.”
Cast in stone.
One of the many light-bulb moments in my own development. 🙂
Love you analysis.
Thanks Ajazz! 🙂
Amazing stuff.
There is a fine line between taking a good re-entry after a scratch/loss and taking low quality entries one after the other ending with a losing streak and a lot of frustration. I know i had to deal with it more than once. With time and practice my entries got better and better, and altough i use a slightly different approach than yours, it’s undeniable that knowing when to step right back in is an important skill that every successful trader must possess.
Thanks for the good content you keep dropping Lance, very interesting articles!
Thanks Dan,
Awesome comment. You raise a really good point.
As said in the article, re-entry ONLY occurs “if the premise remains valid”. Movement against the trade, whether it stopped you out or whether you simply scratched for a reassessment, must not invalidate the trade idea.
The second entry MUST be a valid entry in its own right.
But a significant challenge for learning traders is in differentiating between a trade with edge, and a trade they just hope will work. Especially when the first attempt has lost, ego is bruised and emotion is driving their decision making.
I have a strict “two attempts then reassess” policy. If two attempts at a trade idea fail then I need to step away from the charts for a bit and then completely reassess the market. I’m either out of sync with the market or I’m completely wrong in my assessment. Either way, I have no business trading further.
Stand aside. And wait for some clarity in the markets. Sometimes it takes only minutes. Other times I wait for a complete shift in structure.
Two attempts… then reassess.
And of course, all of this must fit within the daily money management limits.
The last thing we want to do is to get into downward spiral with multiple losing entries one after the other, as we continue to fade a move simply because “damn it, I know I’m right”.
Lance
“Sometimes it takes two entries. Sometimes it takes three.”
i am digesting the quote
now how many times does it take 2 or 3 attempts to go your direction in a 3hr sesssion day week….
thanks
I’ve never quantified this. But I’d say there’s rarely a session go by where there isn’t one.