When being a discretionary trader, having a plan to enter and exit a trade is a must. When trading there are no absolute exact probabilities. There is always going to some uncertainty.
Everyone has a plan until they get punched in the mouth.
-Mike Tyson-
In With The Bath Water
Getting into a trade can be easy. Just buy! If you just buy anything, on a whim or something is fancy looking. You know shiny like a Chuck-E-Cheese token. Go for it! For myself I like to have some idea of what my probability of profit is going to be. Once I have that information, then i can figure out how much to bet.
Out With The Baby
How can you figure out when to exit the trade? Of course, when you make a profit. Or when you take a loss. The question is how much profit or how much loss. Using the Kelly Criterion is the maximal way to bet.
Momentum
I have to trade as a momentum trader. this means that I let my profits run and take my losses. Being in a position means always staying in as long as there is a profit. Taking a loss, ouch! No one likes it, but sometimes it happens. Be prepared to know when your loss point is. Do not ever tell yourself, "I'll stay in until I'm back to even". Know when you are going to exit, win or lose.
Interested in trading derivatives?
Crypto Forex Trading
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