The part at 4:58 really resonated with me...
"If that was your target and you didn't exit out of that trade you may have given it all back and maybe even stopped out.
So, part of the problem when looking at risk:reward, is most people think of it as a static, in other words, your entry to your TP, and then your entry to your stop loss. But trading isn't static, it doesn't just go from one spot to the other, it moves. And it usually wiggles or moves up and down."
"And the point I'm trying to make is that as that price is moving towards your TP in your favor, that money between your entry point and the current price, that's your money."The 'static' thing got me thinking. I mean, I can look at stats and frequency distributions and my mind is at ease knowing that at least the opportunity lies within there. So entries are good.
But the exits... They still seem like a black box to me, whether they work out or not, I'm pulling them out of a hat in some way. I could look at stats but not in the same way as the entries. And I think it's because of that. Entries are static, but exits are not, and entries do not account for a lot of things that exits might and that are much harder to "quantify".
At the end of the day, trade management at its core is just asking constantly "how far am I willing to let price go back before I close this trade" whether the trade is in profit or not (because even if you let it run, very rarely it'll be at an exact high or low). Of course, anything can happen, but I still don't know where the edge in the exit lies or what to truly look for. If I have to be honest, I'm still spinning my wheels on that one.
