Entries do not matter (Course #3)
One thing that I have read many times but never believed is, entries do not matter.
After trading a whole lot of different strategies in a repeatable fashion (algo trading), I found that indeed, entries don’t matter.
Of course, if you get in at a bottom for a long or at the top for a short, it feels nice and the entry is absolutely great, because you get the maximum possible outcome in you think about the market played out. This being said, over time, what will make you successful is really a factor of when you exit AND your system overall (covered course #5).
You should not look at the market and hope to get in here and exit there, because the market is not consistent. The market has no rules and no discipline. Instead, you should look at your system and hope to get out when it’s the right time. It is the same in life, look at what you can control - here this is your system, since you can't control the market. READ THIS AGAIN.
In other words, let’s say I always enter at the wrong time, but the price always goes in my direction for at least 0.25% before going the other way. If I can exit on that 0.25%, I will make money!
If my – consistent, disciplined - trading system can get out at 0.25% all the time, it doesn't matter I had a bad entry, because first of all I am not losing money and second, I am making some.
So yes, entries don’t really matter, but exits do.
Look at Crypto Face of Market Cipher. Very often he enters before a pump, because he is good and because his indicator is good as well. You can call this a “good entry”. But sometimes, he does enter and the trades goes against him. Many times I noticed he would not close his trade, and just wait overnight for it to come back. Let’s say the price does come back, and now goes into profit – he exits. What mattered? His exit. If he had exited when the trade was against him, he would have lost money.
In his book “Trade your way to financial freedom”, Van Tharp talks about it and he explains how a random entry system can beat any other system with a specific entry technique.
Whether you are trading algos or manually, you have to understand that it doesn’t matter when you enter. What matters is your system and when you exit.
My #1 profitable algo is designed to never get in at a bottom or a top, for respectively a long or a short trade. Yet, this algo strategy is profitable.
One thing that I have read many times but never believed is, entries do not matter.
After trading a whole lot of different strategies in a repeatable fashion (algo trading), I found that indeed, entries don’t matter.
Of course, if you get in at a bottom for a long or at the top for a short, it feels nice and the entry is absolutely great, because you get the maximum possible outcome in you think about the market played out. This being said, over time, what will make you successful is really a factor of when you exit AND your system overall (covered course #5).
You should not look at the market and hope to get in here and exit there, because the market is not consistent. The market has no rules and no discipline. Instead, you should look at your system and hope to get out when it’s the right time. It is the same in life, look at what you can control - here this is your system, since you can't control the market. READ THIS AGAIN.
In other words, let’s say I always enter at the wrong time, but the price always goes in my direction for at least 0.25% before going the other way. If I can exit on that 0.25%, I will make money!
If my – consistent, disciplined - trading system can get out at 0.25% all the time, it doesn't matter I had a bad entry, because first of all I am not losing money and second, I am making some.
So yes, entries don’t really matter, but exits do.
Look at Crypto Face of Market Cipher. Very often he enters before a pump, because he is good and because his indicator is good as well. You can call this a “good entry”. But sometimes, he does enter and the trades goes against him. Many times I noticed he would not close his trade, and just wait overnight for it to come back. Let’s say the price does come back, and now goes into profit – he exits. What mattered? His exit. If he had exited when the trade was against him, he would have lost money.
In his book “Trade your way to financial freedom”, Van Tharp talks about it and he explains how a random entry system can beat any other system with a specific entry technique.
Whether you are trading algos or manually, you have to understand that it doesn’t matter when you enter. What matters is your system and when you exit.
My #1 profitable algo is designed to never get in at a bottom or a top, for respectively a long or a short trade. Yet, this algo strategy is profitable.
