Entry is more important Or Exit in a trade to be a successful trader

@Vandana1 You might be completely proper👍

ENTRY is extra essential than EXIT !!!As a result of in case your path(choice at entry) is right you’ll be able to exit at no matter revenue you get.But when your path is improper then you can be getting out with a loss for positive.Due to this fact chance of capital preservation in first case > chance of capital preservation in second case.

In my expertise, exit is way extra essential than entry for changing into a profitable dealer. Right here’s why:

I don’t put a lot religion in value motion, assist/resistance, or indicators. None of those strategies work constantly on a regular basis. If you take a commerce, the end result boils down to only two possibilities: the worth goes up, or it goes down. The magnitude of the motion can range, however the path stays binary.

What really issues is managing your exits with a disciplined risk-reward (RR) technique. The place I enter turns into much less related so long as I execute my exit correctly. As an example, contemplate the analogy of tossing a coin. Over a small pattern measurement, you may see an uneven distribution of heads and tails, however because the pattern measurement grows giant (10,000 tosses or extra), the chances converge to 50/50.

Apply this precept to buying and selling:

Choose a inventory or futures chart (choices behave in another way because of time decay).
Randomly take two trades a day utilizing a 1:2 RR ratio.
Backtest this over a big pattern measurement, say 10,000 trades, and also you’ll see how self-discipline and RR outweigh entry methods or “luck.”

The important thing level is:

Self-discipline and correct RR make you worthwhile, not indicators or value motion.
Even luck has its limits—it solely works over small pattern sizes. Over time, luck erodes its edge.

In truth, for those who establish an edge available in the market, algorithms are doubtless already exploiting it. As algos commerce that inefficiency, the sting will ultimately diminish.

For these serious about backtesting, you’ll be able to validate this in instruments like AmiBroker or different skilled platforms. Nonetheless, remember the fact that most algorithmic methods cap returns round 30-35% yearly. That is nonetheless substantial, particularly with capital above 50L or above.

After all, discretionary merchants can outperform algos considerably, however that requires a unique ability set and mindset, an entire different ball recreation.

Sure, many profitable merchants have emphasised the significance of RR in buying and selling. Merchants like Tom hougaard, fully depend on RR, they make substantial return with technique having as minimal as 30-40% accuracy. In my notion, to extend RR, the main target ought to be in decreasing loss and protecting it as minimal as doable, clearly that can even price on accuracy, however discovering a method that provides atleast 30-40% accuracy with a very good RR remains to be straightforward as an alternative of following technique with good accuracy however minimal RR. I imply, the proportion of loss we need to e book is all the time in our palms, however revenue will not be.