Entry Strategy

[R0n1n]

Hi guys, this morning I was about to do jump in to CTX and was looking at the chart for it when I noticed the dropping volume, and did not make an entry. I did document it (I always take screenshot of my entry and exit) A the time I was looking at the chart the price was 12.60.

What I wanna know from you guys is: Was I right ? What would you have done ? How do you make an entry and on what basis ( I mean what triggers you look for)

 

[Lachlan6]

Gday Ron1n. My personal strategy of entering intra day, is to find a nice entry point from the daily then to look during the day at the 5 minute candlestick. I WILL NOT enter a new trade before 10:30 every day, and I never break this rule no matter what. If I was to go long, I only buy into a strong trend on the 5 minute, with minimal pull backs, and only enter if the buy side in the market depth is strongly supporting the stock. For shorting, vice versa.

For example, I entered a short trade in (WDC) this morning at $20.25. Did so because Daily chart showing obvious weakness, especially the break below the 200 day EMA today. Then my trigger point was $20.25 which triggered earlier. Finally the sellers were very strong and the 5 minute was trending strongly down, so I jumped in. Its a matter of fine tuning everything I spose. Cheers.

 

[R0n1n]

Gday Ron1n. My personal strategy of entering intra day, is to find a nice entry point from the daily then to look during the day at the 5 minute candlestick. I WILL NOT enter a new trade before 10:30 every day, and I never break this rule no matter what. If I was to go long, I only buy into a strong trend on the 5 minute, with minimal pull backs, and only enter if the buy side in the market depth is strongly supporting the stock. For shorting, vice versa.

For example, I entered a short trade in (WDC) this morning at $20.25. Did so because Daily chart showing obvious weakness, especially the break below the 200 day EMA today. Then my trigger point was $20.25 which triggered earlier. Finally the sellers were very strong and the 5 minute was trending strongly down, so I jumped in. Its a matter of fine tuning everything I spose. Cheers.

Why the 10:30 rule ? is it cos of the day traders/instutional buyers ?

 

[CanOz]

If your plan is to enter the break of an ascending triangle, and place a stop below support for a low risk setup, then i would have stuck to your plan. If high volume is a condition of you taking the trade, then you need to consider that too.

Does high volume make it more successful? These are things that you can test for, if your so inclined.

Cheers,

 

[Lachlan6]

Just because pre 10:30 is a little early in the day and you get a better idea of what the stock/market is going to do after 10:30. When I first started up, I found that I had some trades which I entered before 10:30 only to be stopped out intra day. Very frustrating.

 

[>Apocalypto<]

If your plan is to enter the break of an ascending triangle, and place a stop below support for a low risk setup, then i would have stuck to your plan. If high volume is a condition of you taking the trade, then you need to consider that too.

Does high volume make it more successful? These are things that you can test for, if your so inclined.

Cheers,

From what I read you want to see decreasing volume on bullish cont triangles with higher vol on the break out.

 

[CanOz]

From what I read you want to see decreasing volume on bullish cont triangles with higher vol on the break out.

Yeah, you would think that it would certainly be a more bullish breakout...but until it breaks support, could it still be a valid opportunity? Maybe it will be by the EOD?

The more i see discussions on this type of thing the more i'm migrating to the EOD camp.

Cheers,

 

[motorway]

The volume on the last few bars
Is suggesting little interest from the buyers
To particpate at higher prices..

Seem to suggest some more ranging


You seem to like bollinger bands ?

what are they telling you ?

They are giving a signal atm

motorway

 

[R0n1n]

The volume on the last few bars
Is suggesting little interest from the buyers
To particpate at higher prices..

motorway

Motoryway, that is exactly what my thoughts were when I looked at the volume.

 

[tech/a]

When making an entry into anything,you need to ask "What am I wanting to do?"

If you dont answer "Get onto a trend" your not in the right field!
There are 3 places to do this both long and short.
How good your entries are (Relative to both Win rate and Risk reward ratio/drawdown) will be dependant on stop and exit. Regardless of timeframe you trade in.

Above we are seeing debate on the Vehical being used to gain entry and elsewhere exit.This can be debated endlessly.
Point is it doesnt matter.

What does matter is that you KNOW how your entry/stop and exit combination performs. You can guess/dedate and Argue a zillion different Indicators,Variables and Patterns,but without knowing how your application of these tools within your trading methodology (win Rate R/R ratio/Initial and peak to Valley drawdown), will likely perform---you may as well guess each.

With all due respect to those contributing---your missing the target!

 

[>Apocalypto<]

The volume on the last few bars
Is suggesting little interest from the buyers
To particpate at higher prices..

Seem to suggest some more ranging


You seem to like bollinger bands ?

what are they telling you ?

They are giving a signal atm

motorway

Motorway,

Agree with you low vol on the break out period, with a doji candle showing indecision. not very convincing buyer interest at all. In defence it still closed above resistance and made it a possible support.

 

[CanOz]

When making an entry into anything,you need to ask "What am I wanting to do?"

If you dont answer "Get onto a trend" your not in the right field!
There are 3 places to do this both long and short.
How good your entries are (Relative to both Win rate and Risk reward ratio/drawdown) will be dependant on stop and exit. Regardless of timeframe you trade in.

Above we are seeing debate on the Vehical being used to gain entry and elsewhere exit.This can be debated endlessly.
Point is it doesnt matter.

What does matter is that you KNOW how your entry/stop and exit combination performs. You can guess/dedate and Argue a zillion different Indicators,Variables and Patterns,but without knowing how your application of these tools within your trading methodology (win Rate R/R ratio/Initial and peak to Valley drawdown), will likely perform---you may as well guess each.

With all due respect to those contributing---your missing the target!

With all due respect Tech, we're discussing entries, why can't we discuss just entries?

I realise we should never take our eyes off the other more important parts of a trade, and i also realise that all things should be able to be tested.

Cheers,

 

[R0n1n]

When making an entry into anything,you need to ask "What am I wanting to do?"

If you dont answer "Get onto a trend" your not in the right field!
There are 3 places to do this both long and short.
How good your entries are (Relative to both Win rate and Risk reward ratio/drawdown) will be dependant on stop and exit. Regardless of timeframe you trade in.

Above we are seeing debate on the Vehical being used to gain entry and elsewhere exit.This can be debated endlessly.
Point is it doesnt matter.

What does matter is that you KNOW how your entry/stop and exit combination performs. You can guess/dedate and Argue a zillion different Indicators,Variables and Patterns,but without knowing how your application of these tools within your trading methodology (win Rate R/R ratio/Initial and peak to Valley drawdown), will likely perform---you may as well guess each.

With all due respect to those contributing---your missing the target!

tech/a the reason I asked was to know if I am right about the trend forming for CTX, but the doubts about Volume was stopping me and hence my thread to ask for advice.

Can u explain what confirms as a trend ? and what do u you use to confirm it .. like Price Action ...

Being new to trading (just 6 months) i am open to all suggestions and ideas...and another reason for asking about Entry is whith out an entry I have no trade

Can someone point me to a good Candlestick help site please, there are zillions out there but I know u guys would have bookmarked some gems..

 

[tech/a]

Because you have no basis on which to determine whether an entry coupled with you stop and exit stratagy has any profitable merit.

Its like discussing parachuting and just talking about jumping out the plane!

 

[CanOz]

Because you have no basis on which to determine whether an entry coupled with you stop and exit stratagy has any profitable merit.

Its like discussing parachuting and just talking about jumping out the plane!

Ok, we should make it clear that there are a few things that will make a good entry.

One that i know, is risk. We should be discussing entries with a view of how much we will lose if it is unsuccesful. You cannot deny that it will be a vital factor in the overall profitability of the trading system.

So can we agree that we should be discussing entries from a low risk point of view? Obviously, without further testing we cannot know what entries will turn out to be winners vs losers.

Cheers,

 

[rowes]

Can someone point me to a good Candlestick help site please, there are zillions out there but I know u guys would have bookmarked some gems..

Heres a couple i like,

There is Steve Nison's - http://www.candlecharts.com/

and Stephen Bigalow's - http://www.candlestickforum.com/

 

[nizar]

Because you have no basis on which to determine whether an entry coupled with you stop and exit stratagy has any profitable merit.

Its like discussing parachuting and just talking about jumping out the plane!

Agree with tech here.
Theres no such thing as a good entry.
A good entry for one system may not be for another.

Another thing to remember is that few entries beat random entry.

Iv seen a random entry system backtested and returned 30%+ annualised.
And the exit was one of two:
*A 1 year time stop
*100% gain exit.

So the exit wasnt great (at least in theory) as it went against the saying of cutting losers short and letting winners run.

So what was key here?
Universe and money management. 2 factors which in my opinion are more important than entry.

If you want to improve a system look at money management not tweaking the entry.......

(Wheres Michael when you need him?)

 

[Lachlan6]

Couldnt agree more Nizar. Money management is everything. An excellent book to read on the subject is 'Trade your way to Financial freedom', by Van Tharpe. A must read in my opinion if you are serious about trading. Make it mechanical, and dont overanalyse entries, because they are only a SMALL part of the overall trade.

 

[CanOz]

If you want to improve a system look at money management not tweaking the entry.......

)

Nizar, does this thread say that?

I thought we were talking about entry strategies??????

Quite honestly i'm interested in what others like to use as entry's!

I don't care if they're profitable or not, (at this stage) that we know we can determine through testing with exits, money mgt. etc.....later on...

Ron1n started a thread for entry's...why can't we just discuss them without getting wound up in the great debate about wheather or not they're the most important part of trading?

Anyone here understand my point?

Cheers,

 

[tech/a]

I've seen many discussions just like this. As will most who have been involved in trading for a while.

Like all most traders start to discuss Entry/Exit/Money Management/Risk and stop loss when they are either disillusioned with returns or have copped a fair loss. Those that are profitable dont care until it happens to them. Sometimes years down the track.

Most look at the tools that make up a methodology,the components,few look at the application of all the components together---which is what they will do in their well thought out plan.

Then they will go out and trade that plan without knowing how the combination of well intended componentry actually perform over the years.
Worse they have no idea when its likely to fail and it may well fail from day 1.
They could also be trading brilliantly for a few years and not know wether the drawdown they are in should be ridden out or capitulated!
Many GOOD methods get ditched through FEAR.
Frustration abounds as the best placed entries/exits/stops and Money management STILL fail to give a consistent return.


Solution REGARDLESS of the NUTS and BOLTS of a method/the plan,you must know if the plan is long term profitable,and what its performance numbers are.

To do anything different is time wasting and fruitless.
Those that have been or are on that path will totally understand.

So if your serious you'll have to invest in good testing software and the many hours to become proficient in design and testing systems.

Read Adaptive Analysis Pages 1-50 all will become clear/er.