Are you comfortable with entries but not sure when to exit?
Fear not, you are not alone. It is common for developing traders to have many ideas and methods on when and how to enter a trade but all will initially struggle with when to exit. Today I wanted to share a few practical exit methods that can be easily applied to your trading system.
-Once a reversal candlestick or candlestick pattern forms on the 2 highest time frames that you trade off of. (For me, the 1 day or 4 hour).
- The trend breaks on the highest time frame that you trade off of, AKA a lower low and a lower high form in an uptrend. (For me, the 1 day).
- 1.618 Fibonacci extension is reached.
- RSI peak with an historical match to past market tops. Conditions can become very extreme so this method is best used a secondary confirmation. For example, a 1.618 extension is reached with an RSI of 90 on the 1 day. In the past, said asset has began to correct when the daily RSI reached 87 to 93.
- RSI/Volume price divergence on the highest time frame you trade off of. (For me, the 1 day).
- Use a trailing stop.