Han Ziemann

How I enter and exit positions. Why it matters, how I do it, and why most people focus on the wrong aspects. The golden gate to better trading. Some context It's been a while I wrote an educational post. For a reason, I don't particularly like the idea of only writing educational posts constantly. I set the bar high and they have to come along when it makes sense. And besides that, my focus is calls, direction, and posts that are directly tuned to make you and me money. It's most likely why you follow me, and what I enjoy showcasing. Nothing more satisfying than planning a trade, actually taking the trade, and then seeing it turn into a win (or sometimes the occasional loss - full transparency) and having your view and opinion + learning experience and money made along with it. I aim to keep this interactive cycle with you, something that will never change. There just isn't anything more satisfying. But aside from pressing the button, and telling you when I am pressing the button with my posts when the plan is already in place, I never really have explained why I pressed the button. What told me I should press that button, what gave me that "delusional" confidence you ever so often mention and some followers call me out on every now and then. Reasons are extensive, and I have already partly revealed why and what my reasoning is. Not in a full, easy to repeat framework, yet, there is never enough time or space to write or transfer my order of operations in one post. But I have shared bits and pieces relevant to the time of posting. "What's your SL, Astro", or, "How do you pick your SL", is a very common question asked. All will be answered. The good news: my order of operations is always the same. It needs to be, because it limits stress, and gives me confidence that very second one needs to get involved. So with this post, I wanted to go deeper in exactly that, how I catch those beautiful entries, why I sometimes go for less pretty entries as well (not all my entries are aimed for a snipe, as you will learn). Especially relevant now, because two of the most recent trades I took, both have each different style of entries presented. The short last week (using duplets/triplets), and the long Yesterday (using 1 core/kernel). Both trades were taken live, just this week. So no better time than talking about this now. Going deeper to create a better picture and answer a lot of questions. Introduction Trading "execution" is very broad. Every trader executes differently, inherent to style, preference and beliefs. However, I believe only very few ways actually hold merit. Lots of execution techniques are just "Let's preset entry limits, preset SL and preset TP and walk away". "Place TP at 3RR or so perhaps, if I lose, at least I can lose three times between every win, and it looks pretty on the screen." All power to those, but we all know trading isn't that "easy". No matter how powerful the play, you will have occasions where price gets very close to TP before fully reversing to SL. Your entry gets front run and you chase higher. Your "zone" gets front run. Or worst: your SL gets run and price runs to target of 3 RR. All very costly mistakes. Maybe it works for some. But all I ask is: has it ever worked for you? And how satisfactory do you feel about your own trade? (How much do you love the job). That's frankly all that matters. On the other hand, many have a brilliant and accurate plan, but simply can't stomach price fluctuating around entry (entry anxiety), fluctuating underwater (fear of losing), or even fluctuating close to target (fear of frontrunning). No matter what, you are driven by fear. You end up losing overall, and you start blaming yourself, because at the end of the day, the plan played out, but you didn't play the plan. So the problem is not your plan, the problem is not your edge, it's your execution. You may feel weak emotionally because you feel you can't handle "the psychology of trading", even quit the very endeavour that has one of the highest potentials to turn anyone into a quite wealthy being, quite fast: the endeavour of trading itself. Well, the problem isn't the trade or you, mostly, the problem is the execution strategy. Asking too much of yourself. And don't get me wrong, some can handle it. Some are strong, very strong emotionally. But personally, as someone who takes trades every day and every week with substantial capital on the line by now, I can't handle that stress repeatedly. That's just my honest answer. And neither can institutions by the way, given the amount of capital that isn't even theirs, they have at stake. Hence, they must therefore know better how to execute the right way, safely, and smoothly, with far less stress. But how do they do it? That's exactly why I took inspiration of them, and I thank my mentors early on for addressing this early on to me and how to do it, preventing me to form bad habits or costing me my hard earned money for many years. I will remain thankful, for having received a trading career without too much hick-up at the start. But yes, I still had periods where I tried other types of execution and frameworks just to see how I do, and I had periods where I believed in it for a while, seeing the problem with it, so there were times of personal downturn too. Hence, with all that perspective, I developed an optimal execution strategy and framework I will highlight right here, right now. Because I think it's important for my audience to know the baseline, to know it's not your fault if you can't trade your plan. But that it's likely what unfortunately is put out most of the time, or just avoided as a topic as a whole. So, I'm going to share how I enter, which types of positions I take (there are just two types), how I target those positions. How I always feel confident about a position, how I integrate X-ray vision to know what direction price goes, how to verify that (monitoring) and how I get out (invalidation), because we all get it wrong sometimes. And when I do, how it makes me confident that I indeed should be out of the trade. I will also share how I integrate my trades it into my higher timeframe plan, to score large moves, and scale my account drastically. I will be referring to my trades we took this week as relevant material to address my strategy. Let's get to it. The plan comes first. Something often misunderstood. Execution alone doesn't make your trading. Technically it can, that's called scalping. And with tools powerful enough, you can even just enter full swing trades and even investments with institutionally framed trades. Institutions trade too, on all timeframes, so of course, that's possible, and it's quite satisfying. During my time on hedge fund trading floors, technology wasn't as advanced and it wasn't a large focus to go on all timeframes, but nowadays, it's very efficient and easily possible. And some of you may get the honours to learn and understand fully how I do that. But without sharing too much, I am old school in some approach, the core and heart of the tools for execution are to execute at the exact area you planned for, with a direction thereafter in mind. So forming a plan (of where you think price is going, where it is not, what zone you want to enter, - or - going from "nothing" to know when you should be: "looking to long", "looking to short" or "do nothing) first, is key. Because it helps you give direction. It integrates your edge, your reason why you know price is going where it's going, ads to your confidence. And if your plan is in place, then the entering and exiting techniques always line up. After all, the market is one big machine, of sells and buys interacting in very repeatable patterns. Otherwise, you would have never seen the calls I make every single time. Compare my bitcoin short started on Sat 23rd of May. The "plan" there was to take out 74.1k. But it doesn't mean I know exactly where to enter, where to put SL, where to target, etc. So how do I go about that? Well, at least, I know I am looking to short. Thanks to the plan. But next, comes the entry. Styles of entry Yes, there isn't one way or style to enter a trade. There are multiple. Many old school books explain: lump sum, dca, twap, scale, pyramid, ladder, layering, tranche. Most refer to the same, but there are large nuances. I thrive in the realm of simplicity, and in my routine, there pretty much only exist two styles of entry: Duplets/triplets and Core. Two styles I named myself, cryptic perhaps, but the idea is simple: Duplets are two entries taken. Triplets are three, and Core, is one. So when to take which? Great question. And why do they even exist? Another great question. See, the way institutions position, actually are never just through one lump sum. In essence, they never use one "Core" entry. They don't know my "Core" strategy, they are blind to it. Makes sense. They work with huge capital (billions), therefore need time to enter, they do it in multiple stages. What we aim to do, is detect their patterns, and simply do the same. Whenever they enter big obvious amounts with their clear typical footprints left behind, we do the same. And it's not so hard because amongst the tens of entries they do, only few are meant to move the market, and those few, are always easy to detect. So it's those we anticipate and enter right before, because fortunate for us, they are the best ones to time. And look at that, you're timing the market, just like that... Clear footprint of accumulation? Enter initial position in the duplet. Clear footprint of markup? Enter convergence. Signature on top? Enter finalisation of the position. And sometimes, there are no footprints, but instead, they culminate in a said "signature". And that is something I truly hesitated of sharing. But indeed, that is my trademarked signature. That's a core long, one and done. And sometimes, there are neither. It's rare, but it happens. And that's okay. I do miss trades or have to take a higher entry, so be it. You have all witnessed it. So with that, that's it. You are now entering alongside the smart players, and are doing it deliberately (you are quite literally observing it). But remember, the plan comes first. You only look for these inside the zone of interest, or after having a sense of direction already. That sense of direction may come from your edge, your plan, or maybe you just consume my plans with no end. No issue, they are there for a reason (such as Saturday's short). And so you now you have successfully chosen an entry strategy, entered the market with logic, upon the base of a clear directional plan. Congrats, you are already in the top tier of traders. However, you're just in the market. No one ever made money just entering and staying in the market. Technically, you could, and just TP arbitrarily, $700 dollars away. But arbitrary actions lead to arbitrary results. And Arbitrary results are usually average results. Besides, why would you follow a very finessed and simple framework, to only abandon all of it and resort to randomness there-after? The next goal therefore is, to understand where to get back out. Monitoring and liquidity. That is the whole reason why, you monitor your trade. To "see how it's going" But more-so, to see if the liquidity that you anticipate, is building. What does that mean, Astro? Well, every time you enter a trade based on a plan in an interesting zone, with a direction of interest in mind, the institutions will aim for that same direction, assuming your trade is right, they are always "right" after all. So the funds (could be large, could be small, mostly large) targeted by the institutions, are being hunted. And the institutions know exactly where their liquidity is. In fact, they plan their volume with how thick or thing the liquidity is at that time (market depth), to push price to that zone where the funds likely exit (market depth aggression). Thin air requires less volume, less aggression, thick air more. Doesn't mean they have to exit and take the loss, but they very likely will right there. That volume is in parallel with how much liquidity is generated inside the range first, before the push out of it. So based on that key volume, that's exactly how those zones can be estimated. There are more methods and it's always good to cross-verify in probability driven markets, but simply think: institutions generate liquidity, then target it, done. Those zones are perfect to target because price always responds and pulls back from that liquidity or at least slows. Why? Well what's the worst thing that can happen after being stopped on for example a long. Price keeps dropping? No, then you would feel relieved. "Thank the lord I was stopped because price dropped further anyway". It's for price to range or retrace. "Stopped me out on the bottom then ran anyway". Horrible. So, those are perfect TP's to go for a first or second partial. Let's just assume it is a first partial. Your very first partials is taken, all nice and step by step. What happens after the first partial? Take the long of Yesterday for example. What happened after the first partial, what did I do? I pinpointed my SL. That's right. I placed my SL only after the first partial. But why, Astro? Does that mean you have no SL the entire process? Not exactly. I still have an invalidation, but I don't place it for the exchanges (and now the world) to see. Because whether you are a conspiracy theorist or not, every single SL placed, is open for targeting potentially, especially when you are a bigger player on the exchange. So what to do instead? Well, the same way you detect the liquidity of the large funds who are targeted, you detect the liquidity of the institutions. Why? Because that's the exact area they are going to lose, or fail, or get wiped. But they never lose (they make the markets), and so they will defend their own position and liquidity. Certainty? No. But very very likely. And it rarely comes to that point. It does happen though, but then your plan or read is likely wrong. Happens to the best of us, admittedly. But regardless, it is a great area to place your invalidation under. Right under the liquidity of the winners. (Not in, but under). And with that I don't mean, place a hard SL, but more so: if that price is reached, see if that remains their liquidity, and get out manually if it does and they are knocked out. Once your first partial is reached, it's acceptable to place your SL as a hard SL. Because by then, price is far gone, and it's just very hard to manage so many SL's manually if you take multiple trades. For example, I have 4 long runners from the 60-80k range (I kept runners in alignment with my said "plan", the plan comes first). I am not going to monitor all of them manually for exit. That's just my honest approach, and that's just the retail trader in me. But, the good part: it works quite well. Because once institutions targeted the liquidity of those funds, their liquidity rarely changes or requires defence. So no need to really watch them closely anymore. Just a gift of the lords of the market. There are more invalidation strategies and ways to cross-verify, again. But here is just a solid taste of it. So, with TP's and invalidation in place, the way institutions do it, what's missing? Not so much. But the sharp eye noticed: I talked about entry, about invalidation, about targeting. But no money is made if no size is involved. I indeed haven't talked about sizing, how to choose the right size to enter. Not as straightforward as retail trading with defined risk. And with an entry of duplets, triplets, or core size, there are some variables, as well as no "predefined SL" indeed. Position Sizing Again, we once more try to mimic the institution. That's our core goal. And the shocker here is: the institution doesn't vary its size. As retail often does: when the SL width is half, to have the same risk, their size doubles. Great technique to score clean "RR's". But tight SL syndrome becomes a real threat here, where fees and slippage impact become substantial as well as moving SL and making mistakes/oversizing. Institutions only care about how deep the markets are (how thick/thin liquidity is), and calculate how much they can move the market for what profit. Without too much complexity added, again: they simply make more if the market moves more, and make less if the market moves less. What does that remind you of? Indeed, fixed position sizing. Always going 2x long, means if market moves 5%, you make 10%, if market moves 10%, you make 20%, etc. No matter where your "stop" is. See, the institutional "stop width" is very typically rather similar. That's why you see the stop of my core position be almost the exact same width every time. And the stop of my duplets or triplets also have the exact same width every time. Hence, fixed position sizing is key. Now about the relative sizes? Say if my base size is 1x, how much is my core size, initial, convergence and finalisation in my duplets/triplets? Again, we copy the institution, and mimic their relative volume. Mostly it's along the lines of: Core = 2x. Initial = 0.7x, Convergence = 1.5x, finalisation = 1x, or similar. This framework varies, but just to give an idea. And yes duplets and triplets are generally bigger positions, with bigger targets in mind (as is for the institution). TP sizing I haven't talked about TP sizing yet. How much should I partial. Do we also follow the institutions? For once here: the answer is no. See, we can track the volume of the institution, but we can never track the intent, what they want with the position. Is it a hedge, is it to target, is it to cover? etc. That intent is locked behind their doors. But, what we do know: it's probably to make money, and do it with less capital stress (sharpe ratio impact). Hence, the simplest and clearest TP or "partial %" to take, is simply by taking as much as you need to limit a downswing if you are wrong after 1 TP. "No trade you had work out, should ever end in a loss". That's some slight old school mindset adoption. But in case of stress free trading, very effective. So, we simply TP the exact right amount to make sure the trade is, when hitting SL after the first TP, no longer a loss. How much is that? The formula is always the same: Trim % = 1/(1+RR). In the case of our long taken yesterday, the liquidity sat at 1.82RR, so trim % = 1/(1+1.8RR) = 35%. I took 40% to cover fees and have some excess profit already. The conclusion of this, is: after first partial, a trade is never a win. But it is a loss eliminated/risk eliminated. And eliminating risk should always be a first priority, after. A good business, tries to survive first, and thrive second (at the second TP), and many more to follow, indeed, in alignment with the higher timeframe plan (back to the plan). That's how good businesses operate, that's how institutions operate, and that's how good traders operate. So that's how I operate, inside this entire framework manifesto I just laid out for a large part as well. And that's how I have been enjoying sharing every entry, every exit, and every trade I have taken on my X page, live.