When thinking about trading or investing, most people seem to focus on entries. "What should I invest in?". "I think now is a good time to buy XYZ....". Considering entry seems intuitive enough. But is this the most useful place for your attention in considering a trading plan?
My recent and ongoing work in writing automated systems has illustrated for me the importance of exits. Tests of many systems over a number of different markets and even different time frames have shown that more profits can be squeezed out of exits than entries. Exit heuristics are also more important than entries in the limiting of losses.
It seems that a good trading system could be handed to someone who has portfolio of trades / investments already in place through whatever method they originally used, and that the system would then be able to immediately tell them when to exit for a loss or profit, if any of the positions are over-sized, and when to move that exit point along with new directional moves in favor of the trade.
It's almost like entries are fools gold. Tactical traders are provided with profit opportunities partially because so many fundamentalists, technicians, and dollar cost averaging traders ("investors") focus on the entry. More attention should be placed on your exit strategy.
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