Tactical Trade Timing Techniques
Why Timing Matters in Trading
A few ticks can be the difference between a win or a loss. You could be right on the direction of a trade but still end up losing if your timing is off. This applies to both entries and exits – timing can significantly impact outcomes.
As Michael Platt of Bluecrest Capital said:
“There are times when you can see a market situation developing but can’t find a low-risk way to express the idea.”
A small change in entry can have a huge impact on the exit, especially when working with fixed risk-to-reward (RvR) strategies.
Improving Trade Entries
To optimise entries, rethink confirmation. Ask yourself:
- Do you really need to wait for full confirmation?
- Can you identify the signal earlier?
Understanding the difference between a signal and a trigger is important. A signal shows readiness, while the trigger tells you when to act. The key is to read the market’s rhythm, understand the context, and work within its flow.
Optimizing Exits and Stops
Can you improve your exit, even on a losing trade? It might be worth fighting for better stop fills or adjusting stops based on market behavior. Whether you use a fixed, trailing, mental stop, or a combination, consider each option carefully.
Checklist for Trade Entries and Exits
Before entering a trade, review:
- Is the trade structure sound?
- Is the RvR reasonable?
- Is your stop in the right place?
- What is your target, and is it achievable?
- How has the market behaved recently, and what does that imply?
For exits, ask yourself:
- Can you improve the stop or target?
- Should you take partial profits?
Summary
Timing matters because it can impact the potential of your trades. Assess the market context, analyse the most likely target, and always consider how you can improve your entry and exit strategy. The better your timing, the more potential you unlock in your trades.