When To Exit An Emini Trade

When To Exit  - Required Reading For All Emini Traders

Traders of all types: Emini Futures - Stocks - Options, spend a lot of time and money trying to figure out the "perfect time" to enter the market. We're guilty of it ourselves. We've built unique proprietary indicators that do an awful lot of mathematical heavy lifting in the background while we sit patiently in our tidy offices and wait... and wait... sip our coffees and iced teas and wait... against a backdrop of computers humming, our electronic warriors lifting, and sifting, and churning data while we wait... and then the signal comes in, we check and double check, shift time frames, verify volume, compare our oscillators to the Tick, Trin, and back again. Sometimes we pull the trigger but most times we wait. 

We fail to confirm on the Advance/Decline or the RSI or Woodies CCI and so we wait...

Sounds a bit strange, odd, possibly even mad, but we're traders and that's what traders do. Truth is, entering a trade takes no education, no degree, no experience, no Fibs, Fans, Arcs or Pitchforks. It's one of the simplest things in the world to do. We flex one finger and it's done. Turns out, not one trader in the history of trading ever made a dime entering a trade. The only way to make money on a trade is to exit. That's correct, it's the getting out that pays the bills, carves out a career and creates legends, not the getting in.

Now that we have our mind right let's talk about the truly important side of the equation - the exit. There are only three reasons to exit a trade:

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The Week Ahead In Emini Futures

Friday the S&P 500 Emini Futures made a stunning recovery at our lowest Weekly Trading Zone as discussed in the Thursday night Partner's Meeting.

The Week Ahead In Emini Futures

Last week we discussed just how close we are to all time historic highs in the S&P 500. Friday's closing price of 1410.50 (inside a Weekly Trading Zone) puts us roughly 140 points away from the highest levels ever reached. Some would suggest that given the anemic economic conditions which currently exist world wide, something is a little off with this picture. 

We wrote an article Trading The Golden Cross earlier this year. It stated that from a historical perspective markets do rally in Presidential election years. Over the past 112 years (28 election years) the Dow Jones Industrial Average (DJIA) has produced an average gain of 7.3%. Toss out 2008 when we were already in the midst of a recession and it jumps to 8.8%. Two-thirds of the periods were positive for the market, while election years with major losses were rare. Election years that showed double-digit gains outnumber those with double-digit losses by nearly 3:1 – and only one of those double-digit losses occurred after 1940.

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Emini Futures | Emini Range Charts

After a 90 point rally, the Dow Jones Industrial Average DJIA fell 33.45 points, or 0.3%, to 12,598.55, its lowest close since Jan. 18. The S&P 500 Index SPX dropped 5.86 points, or 0.4%, to 1,324.80. The Nasdaq Composite COMP declined 19.72 points, or 0.7%, to 2,874.04.

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Emini Futures | Emini Volume Charts

The S&P 500 Index SPX fell 7.69 points, or 0.6%, to 1,330.66, ending below a key technical support, at 1335. Down 9 of the last 10 sessions, the Dow Jones Industrial Average  DJIA dropped 63.35 points, or 0.5%, to 12,632.

CFRN Partners spent the day trading inside of a range defined by our Weekly Trading Zones. Is it possible to wring 35 points out of a 7 point range? Probably not, but it can be fun trying...

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