Entry Strategy

[motorway]

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.

totally disagree..

entries in harmony with the flow of demand and supply
Vs in opposition with the flow of demand and supply

Is Why in another type of flow
So many drown.

With no entry there is no risk or reward

When an entry presents itself
Then risk and reward can be computed..
And If it does not meet our requirements
We can refrain and wait for the next entry

Can not walk through wall unless there is a door

A stock that trends strongly for 3 years
You want entries that are with that flow

Now risk reward is paramount

But until the opportunity presents
there is nothing to compute..

random entry could only be as good

If you have NO analytic skills
and can not recognize trends
emerging from ranges

So I focus on the entry
I lie in wait I don't force
opportunity knocks

then I compute where the stop would be
what upside I could expect

all clicks GO..

motorway

 

[nizar]

Ok motorway, im not arguing with you.
Your one of the professionals of the market, doing much better than me.

Thanks for your contribution.

 

[tech/a]

Anyone here understand my point?

Yes I certainly do!

But cant you also see that you'll end up with countless entries all as good or bad as the way they are applied in COMBINATION with other factors.
Really quite pointless.----its not where the money is---enrty/exit/stops/Money management and the combination of them all.

The money is with the positive expectancy and the NUMBERS generated in testing 1000s of portfolios or singular charts.

Its the NEXT step evidently a small % of people take.

 

[CanOz]

Yes I certainly do!

But cant you also see that you'll end up with countless entries all as good or bad as the way they are applied in COMBINATION with other factors.
Really quite pointless.----its not where the money is---enrty/exit/stops/Money management and the combination of them all.

The money is with the positive expectancy and the NUMBERS generated in testing 1000s of portfolios or singular charts.

Its the NEXT step evidently a small % of people take.

So let me get this straight, you really don't give a "flying rats ass" if your entry is a low risk entry or not? In your opinion a low risk entry won't matter in the long run whether or not your system is profitable or not? What your saying is low risk or high risk, once you consider and test the other factors, it doesn't matter, and you've tested this?

Cheers,

 

[tech/a]

Give me a low risk entry an example of---I'll bet its got everything with stop placement and little to do with the entry mechanism itself.
And in answer to your you dont give a rats---in some cases tested ---no I dont!

Motorway I know and agree (to a degree)with what your saying but will answer when I have more time.Why do these indepths always start when i have meeting after meeting!!.

 

[>Apocalypto<]

totally disagree..

entries in harmony with the flow of demand and supply
Vs in opposition with the flow of demand and supply

Is Why in another type of flow
So many drown .

With no entry there is no risk or reward

When an entry presents itself
Then risk and reward can be computed..
And If it does not meet our requirements
We can refrain and wait for the next entry

Can not walk through wall unless there is a door

A stock that trends strongly for 3 years
You want entries that are with that flow

Now risk reward is paramount

But until the opportunity presents
there is nothing to compute..

random entry could only be as good

If you have NO analytic skills
and can not recognize trends
emerging from ranges

So I focus on the entry
I lie in wait I don't force
opportunity knocks

then I compute where the stop would be
what upside I could expect

all clicks GO..

motorway

Great Reply Motorway,

Tech I see what your saying there is no such thing as a sure entry low risk.
I totally agree with that.

Each entry and trend is unique in my opinion.

 

[CanOz]

Give me a low risk entry an example of---I'll bet its got everything with stop placement and little to do with the entry mechanism itself.
.

Ok, heres an example, "OOPS" LONG. Stop buy just over the low 1 bar ago, then stop loss, at open today.

Low risk.

Cheers,

 

[R0n1n]

When an entry presents itself
Then risk and reward can be computed..
And If it does not meet our requirements
We can refrain and wait for the next entry

Can not walk through wall unless there is a door

Now risk reward is paramount

But until the opportunity presents
there is nothing to compute..

So I focus on the entry
I lie in wait I don't force
opportunity knocks

motorway

Motorway couldn't have put it better.

I know what Tech is saying is right, even a well planned entry can be blown away if no defined money management, position sizing and exit strategy is used.

Lemme ask my question again with an example. Look at BSL below, do you think I would have bought it on 14th of this month? NO. But of course, some here will just hold on to it and eventually it will turn around and rise, but thats not me.

On the other hand lookup the chart of QAN. I entered on 23rd and I am still hanging on.

If you look at my first post in this topic I mentioned I nearly jumped in CTX today, now at 4:25 PM, u can see that it may not have been correct at that point in time. I still donno, and thats why I asked:

How do you make an entry and on what basis (I mean what triggers you look for)

Like motorway says how do u spot that door in the wall?

 

[wayneL]

In this thread I am reminded what I read in "The Way of the Turtle" recently.

"...In fact some traders believe in there particular style with such fervor(sic) that all others are considered inferior. I hold no such belief. Anything that works, works. Doggedly sticking to a method to the exclusion of all others is foolish."

Do entries matter? YES... and... NO! eeerrrrr MAYBE!

It depends on the context of the traders method. Let's not be blinded by the success of our own method, biases. I happen to think entries are VERY important. As a swing trader, it is of paramount importance to the expectancy of the trade.

In big trend following systems it might not be important at all. But that begs the question... why have entry criteria then.

The "low risk entry" terminology is one that has been argued at length before, apparently without result. Yes it relates to the position of the stop; that's a given. But thats what technical trading is all about, a visual method of determining what risks to accept and what rewards to shoot for.

The thread is about "Entry" techniques. Let's discuss them and talk about trading systems methods in their entirety someplace else.

Cheers

 

[R0n1n]

The thread is about "Entry" techniques. Let's discuss them and talk about trading systems methods in their entirety someplace else.

Cheers

Thank you WayneL. For swing trader what all tools/entry positions do you use?

 

[tech/a]

Wayne.
Happy to do so however there are some glaring incorrect and misleading "Facts" which need to be pointed out.

When an entry presents itself
Then risk and reward can be computed..
And If it does not meet our requirements
We can refrain and wait for the next entry

(What are "requirements")

Can not walk through wall unless there is a door

Now risk reward is paramount

Its unknown until traded in this case.
At best its a calculated guess.

But until the opportunity presents
there is nothing to compute..

Wrong---until enough trading results are known there is nothing to compute.

So I focus on the entry
I lie in wait I don't force
opportunity knocks

Motorway.
There is a VAST difference between a "Percieved R/Ratio" and a positive expectancy.
Herin lies the downfall of most discretionary traders.
They believe they are trading a positive expectancy simply by setting a stop level and an expected return level and calling that a positive expectancy of X.

This is totally/100% and completely incorrect.
Its clear that most have no idea what positive expectancy is and why you need to KNOW IT.

If they were to trade 200 trades a year over 10 yrs and 20000 portfolios the RESULTS (from the setup/stop and return) would tell you what expectancy (return relative to risk) you could expect if you applied the above over and again to trade.

Same for testing ENTRIES. You need to test an entry over many trades over many time periods.

Wayne your Brushing the MOST IMPORTANT issue in learning to trade consistently profitably-----under the table.
You cannot look at entry in isolation.

If there is onething you'll have learnt I would have thought from "The Way of the Turtle" its the almost fanatical approach that Faith has to testing,even to the point of developing his own tests to measure his trading differently than most.

To just trade with blinkers "Cause its easier" is financial suicide.

Then of course we get to how you turn a 26% a year mediocre trading methodology into a 1300% return over 5 yrs.
Entry??

I'm not talking about Systems I'm talking about how YOU or ANYONE can find the BEST ENTRY for their Trading platform and KNOW IT

Wasting my time again.

 

[wayneL]

Wayne.
Happy to do so however there are some glaring incorrect and misleading "Facts" which need to be pointed out.

Wayne your Brushing the MOST IMPORTANT issue in learning to trade consistently profitably-----under the table.
You cannot look at entry in isolation.

If there is onething you'll have learnt I would have thought from "The Way of the Turtle" its the almost fanatical approach that Faith has to testing,even to the point of developing his own tests to measure his trading differently than most.

To just trade with blinkers "Cause its easier" is financial suicide.

Then of course we get to how you turn a 26% a year mediocre trading methodology into a 1300% return over 5 yrs.
Entry??

I'm not talking about Systems I'm talking about how YOU or ANYONE can find the BEST ENTRY for their Trading platform and KNOW IT

Wasting my time again.

Tech,

It's not brushing anything under the table.

An entry should of course have relevance to the other "vectors" of a trading plan.

But entry is an integral part of any trading plan and can, and should be discussed in isolation. Radge does it, Faith does, evrybody does if they want to test their ideas.

Of course that idea should then be carried forward to see if it fits withing the entire framework of a complete system. I don't think anyone is suggesting otherwise.

So there is no need to come to such arrogant conclusions as your post above.

If you notice, the OP has a thread on exit strategies as well. Perhaps he is piecing together the components for an overall strategy, I don't know. But FFS let him discuss entries on this thread. That's all I'm saying. The topic of the thread is ENTRIES.

 

[tech/a]

Fine I'll leave the topic.

 

[motorway]

What are "requirements"

I have to be clear what magnitude of move I am trading
and over what time frame that magnitude will express itself

Its unknown until traded in this case.
At best its a calculated guess.

The market is not a pair of dice
There is always the element of calculated guess
The universe of the possible in the mkt has vague limits.
A non random ordering
and a constant fluctuation in the probability distribution

Wrong---until enough trading results are known there is nothing to compute.

Well I agree with that

But I was talking about a particular entry presenting itself along with
stop placements and triggering further analysis

The entry determines the risk

I have total control of the entry
I have less than 100% control of risk

reward is dead reckoning .. (I can not make the mkt perform)

Seeing entry is the only thing I have 100% control of
It is where I can make the most influence ..
So entry for Me IS important

motorway

 

[motorway]

Like motorway says how do u spot that door in the wall?

If you are in a room
and you want to get out
and you do not know what a door looks like

You probably will be better served by
donning a blindfold
and randomly
walking in to the walls

If you know what a door looks like
You will be much better served by scanning the surrounds until you
identify a door and simply walk through

A door has a certain characteristics
That can be recognized

Buy setups have certain characteristics
They can be recognized

appearance vs character

Is the market a random probability machine
with no characteristics to identify where the fat tails lie

Or does the mkt move from forced move to forced move
as technical positions are formed and dissipated ?

Is there such a thing as a line of least resistance ?

motorway

 

[Sean K]

Wayne.
Happy to do so however there are some glaring incorrect and misleading "Facts" which need to be pointed out.

Motorway.
There is a VAST difference between a "Percieved R/Ratio" and a positive expectancy.
Herin lies the downfall of most discretionary traders.
They believe they are trading a positive expectancy simply by setting a stop level and an expected return level and calling that a positive expectancy of X.

This is totally/100% and completely incorrect.
Its clear that most have no idea what positive expectancy is and why you need to KNOW IT.

If they were to trade 200 trades a year over 10 yrs and 20000 portfolios the RESULTS (from the setup/stop and return) would tell you what expectancy (return relative to risk) you could expect if you applied the above over and again to trade.

Same for testing ENTRIES. You need to test an entry over many trades over many time periods.

Wayne your Brushing the MOST IMPORTANT issue in learning to trade consistently profitably-----under the table.
You cannot look at entry in isolation.

If there is onething you'll have learnt I would have thought from "The Way of the Turtle" its the almost fanatical approach that Faith has to testing,even to the point of developing his own tests to measure his trading differently than most.

To just trade with blinkers "Cause its easier" is financial suicide.

Then of course we get to how you turn a 26% a year mediocre trading methodology into a 1300% return over 5 yrs.
Entry??

I'm not talking about Systems I'm talking about how YOU or ANYONE can find the BEST ENTRY for their Trading platform and KNOW IT

Wasting my time again.

I'm probably out of my zone here because I discretionary trade, and am more an investor. Entries are a very important part of my trading and investing. I would rarely enter a long trade when a stock was in a downward trend, for example. Actually, I don't need to say anything else, it seems quite clear to me how important it is to pick a good entry. Having said that, entries can not be considered in isolation from an overall plan which seems to have been covered, with an exit probably the more important trading mechanism. I can't understand though, why entries can't be considered here, there are low and high risk entries IMO. For example, I look for a stock in a near perfect set up: General upward trend, stochastics moving up through 50, MACD moving up through zero line, stock not approaching significant resistance, RSI under 80 moving up, and the market not about to crash......Probably much better opportunity to buy long than the opposite Hope I'm not off track here.

 

[R0n1n]

I'm probably out of my zone here because I discretionary trade, and am more an investor. Entries are a very important part of my trading and investing. I would rarely enter a long trade when a stock was in a downward trend, for example. Actually, I don't need to say anything else, it seems quite clear to me how important it is to pick a good entry. Having said that, entries can not be considered in isolation from an overall plan which seems to have been covered, with an exit probably the more important trading mechanism. I can't understand though, why entries can't be considered here, there are low and high risk entries IMO. For example, I look for a stock in a near perfect set up: General upward trend, stochastics moving up through 50, MACD moving up through zero line, stock not approaching significant resistance, RSI under 80 moving up, and the market not about to crash......Probably much better opportunity to buy long than the opposite Hope I'm not off track here.

Thats the kinda answer I have been looking for in the last two pages. thanx Kennas.

Motorway your reply looks more like a poem/puzzle

Everyone has opinions and we may not agree with em all but we can respect them...
so lets keep those Entry strategies coming..

Oh yes I am working on my system... and hence so many queries...

 

[RichKid]

I have to be clear what magnitude of move I am trading
and over what time frame that magnitude will express itself



The market is not a pair of dice
There is always the element of calculated guess
The universe of the possible in the mkt has vague limits.
A non random ordering
and a constant fluctuation in the probability distribution



Well I agree with that

But I was talking about a particular entry presenting itself along with
stop placements and triggering further analysis

The entry determines the risk

I have total control of the entry
I have less than 100% control of risk

reward is dead reckoning .. (I can not make the mkt perform)

Seeing entry is the only thing I have 100% control of
It is where I can make the most influence ..
So entry for Me IS important

motorway

hi motorway, long time no speak!
Good points, taking or not taking a trade is something we can decide on completely alone.
but, if you look at Radge's book Adaptive Analysis and some of the other things he's written about discretionary trading you'll see that he mentions the amount risked as the only thing that you can control. ie you can set a stop at say 10% from the entry and once it's hit you sell at that point (slippage excepted and psychology permitting)- so you can control the position size and the loss you are prepared to take. Fine tuning your entry criteria helps here but in the context of things entries aren't the most important- the exit is, as in the example above, as it's exiting that helps you cut your loss....keeping you in the game by keeping your losses small. obviously we need big winners to mop op the numerous losses and there is an art to pyramiding and not selling prematurely but that's another topic.

PS in terms of entry criteria I normally follow the traditional trading tactics for each pattern, eg- ascending triangle, after the first pullback to the breakout level. cf- some buy on a close above the breakout level- in the case of the ascending triangle it would be the resistance line. Stops can be at the apex of the triangle or the previous swing low.....there are so many methods, I take each chart pattern on its own and see where it fits in with EW invalidation points and the overall trend, the more confluence the better.

 

[motorway]

Ok back to CTX

The bar chart lays out the character of action

We have some higher volume bars that don't making much progress.

So sellers are meeting buyers

sellers are meeting buyers because the price has moved up to find them..

What is happening ?

The price has moved up already ( was there already good buy setups ? )

The current bars ? There are closes at the lows and some near the highs

So Buying is absorbing the supply
or there is distribution happening

what can make it clearer ?

What ever way you can do it
You have to look at comparative relative strength

here the P&F C. RS chart Vs the XJO

shows strength

I would with the available information
Say that buyers are absorbing the supply

I would be looking for an entry
on a breakout from strength from this zone of "absorption"

( Well what do you think will happen when available supply at the price is absorbed ? )

Or if there is weakness .. dependant on the Price Vol characteristics
I would go long at the 50% retrace

( remember trends are higher highs and higher lows, A higher low is a very good entry point )

I am leaving aside the placement of stop
or other considerations..

Buy in the absorption area ?
The two scenarios will confirm the character of the action I have posited.
atm I do not have confirmation

supply can confirm a long position
by the character of the action as price reacts back..
Demand can confirm by breaking out

A breakout from an area of absorption
is a valid breakout less likely to be a trap..

The bars also have rising lows ( except the last one )
They overlap ease of movement is not evident
one side taking out the other..

But look at the relative strength


I would judge the lower risk entry is on the reaction back
as a small selling wave is absorbed and dissipated

esp if the relative strength stays strong..



motorway

 

[motorway]

if you look at Radge's book Adaptive Analysis and some of the other things he's written about discretionary trading you'll see that he mentions the amount risked as the only thing that you can control.

Hi Rich

I say I can 100% control the entry
but less the risk

I can set a stop
but the mkt can gap down
the stock can be suspended

So I can set the stop position 100%

but does not mean it will be filled

also I would use a logical stop position that
negated the action I had defined
rather than an arbitrary %

So that is why the entry is important
the stop has logical positions ( with wiggle room )

It is possible to have the stop very close to the entry.

Buying CTX on the reaction will mean a tighter stop is possible than
buying on the breakout maybe depending at the time on the setup that presents..

motorway