V.11:11 (462-466): A New Exit Strategy by Adam White

V.11:11 (462-466): A New Exit Strategy by Adam White
Item# \V11\C11\ANEWEXI.PDF
$5.95
Availability: In Stock

Product Description

A New Exit Strategy by Adam White

Most traders search for entry signals for trading systems and use a reversal of the entry signal for exits. Sounds simple enough, right? But what about developing exit strategies separate from your entry method? Here, technical analyst Adam White discusses an exit signal called the CHL/LLF based on two types of indicators for exiting trades.

To be truly effective, a trading strategy requires that the trader in question hold his or her positions whenever the risk/reward outlook of the market appears to be sufficiently attractive to warrant it. Typically, this is based on the idea that a trend has developed and will continue for a period, long enough for the savvy market participant to realize a profit. In some trading methods, the same indicators used to detect the trend's beginning are also used to detect the trend's end, while in other methods, one set of indicators will be used to define the entry point and another set of indicators to identify the exit point. The CHL/LLF is a new exit method designed to identify a trend's conclusion and a conclusion only.

The CHL/LLF method incorporates two indicators, one of which is a filter and the other of which is a trigger. The first indicator is called the concurrent highest lows pattern, or CHL. The second is the low to low fall indicator, or LLF. To maintain clarity and brevity I will refer, illustrate and test only long positions here. I contend that strategies that are effective for exiting short positions will have parallels to the long positions that I will show here. Here, then, is the theory behind the CHL/LLF and its construction and a test that quantifies performance.

INDICATOR THEORY

Longer-term trend-following methods generate trading signals when the current trend reverses and moves a given distance in the opposite direction. Thus, they have both a particular strength and a particular weakness: they are effective at staying with a trend as long as it moves in the desired direction, but they also suffer the flaw of giving back equity before the signal occurs.




FOR THOSE ORDERING ARTICLES SEPARATELY:
*Note: $2.95-$5.95 Articles are in PDF format only. No hard copy of the article(s) will be delivered. During checkout, click the "Download Now" button to immediately receive your article(s) purchase. STOCKS & COMMODITIES magazine is delivered via mail. After paying for your subscription at store.traders.com users can view the S&C Digital Edition in the subscriber's section on Traders.com.




Take Control of Your Trading.
Professional Traders' Starter Kit
All these items shown below only $299.99!
  • 5-year subscription to Technical Analysis of STOCKS & COMMODITIES, The Traders' magazine. (Shipping outside the US is extra. Washington state addresses require sales tax based on your locale.)
  • 5 year access to S&C Archive
  • 5 year access to S&C Digital Edition
  • 5-year subscription to Traders.com Advantage.
  • 5-year subscription to Working Money.
  • Free book selection.
  • Click Here to Order