Happy New Year.
I have what I think could be a reliable system but my exits are all wrong.
I enter the position, it moves in my favour - this happens probably 60-70% of the time.
If it moves against me, I'm normally stopped out early(ish) - that is, I give it a bit of room but I don't hold on to a losing position. This bit I'm proud of.
However, where I fall down is that I get into a nice bit of positive territory (e.g. 10-15 points in my favour) but then the next swing takes back almost all/a big chunk of that position.
The session nears the close, the spread widens (e.g. from 1 or 2 points to 4 or 5), and hey ho I've grabbed a losing position from the jaws of success.
I think about smaller profit targets (e.g. 10 points) but since my stops are normally 10-15 points, that makes my R less than 1.
Today is a good example. I was trading the SPI. I entered short (4726) seeking a retest of the recent lows. My target was 4696, my stop was 4741 just above the pivot point. So, my target was about 2:1.
I got on a good move down to 4701 so I was +25. I didn't make the target. Now the swing has taken us back up to 4715. The spread has widened to 5. I'm just about breaking even.
This happens a lot to me. What is translates to (in my recent trading diary) is a bunch of winning trades (around +3 points) and a few losing trades (around -12 points).
Like I said above, I often think about taking 10 point profits but that then leads me to reduce my stops to e.g. 4 or 5 points. That then translates to high numbers of consecutive losers due to noise.
I can see my logic is good, my exits are lousy.
Please could anyone offer some guidance?
Thanks for your time.