Exiting a trade

[beamstas]

Hey Brad,

What code do you use to generate the random Buy Signals? Is it similar to that contained in Howard Bandy's book or something else?

I use an adaptation of his formula, with my trade management overlaid over that.

 

[Mr J]

What happens if you keep getting stopped out of a trade and you enter again and again?

You'd want rules to prevent that. Ideally, the strategy would take care of it. My strategy for example, if I get stopped out I'm probably wrong anyway.

In relation to second point, i don't agree with the 2% rule. I think 0.5-1% is far more sensible.

If we're trading for a profit, 2% is fine in terms of risk, providing margin and large intraday drops aren't a factor (e.g. very shorterm trading at 2% could lead to a world of hurt if the market drops and the broker goes down).

dont we all predict entry and exit prices ?

I don't, at least in regard to the exit. I may have a rough idea, but I'm a believer of taking what the market offers. As for predicting turning points, I'd call myself a reactionary trader than a predictionary trader. I like to see the market react, as I feel that is what makes the trade a higher probability trade. Before the market reacts, I'll see everything as just potential.

 

[Timmy]

The doco has been taken down from Youtube, but now there is a torrent floating around...
http://www.elitetrader.com/vb/showthread.php?s=&postid=2519450#post2519450

I found that torrent too, works fine. Very entertaining and instructive doco.

Yes, not just spoofing the depth, but people around here have dismissed the notion that traders try read the underlying psychology of the market, be it play by play in the order flow, or on a daily level.
...

dismissing a certain strategy or idea without enough knowledge of how these guys do their thing.

Amen.

P.S

i should point out that in NO way am i viewing those that have paid or paying for courses /books/ learning with any scorn WHATSOEVER .. if it works for you .BRILLIANT STUFF

i do however view those that think that THERE way is the only way to do things in the market,i do hold those ideals with contempt and scorn

there is none so blind that cannot see

end of sermon

amen

Amen.

 

[tech/a]

I use an adaptation of his formula, with my trade management overlaid over that.

Tradesim has it in built.

Yes, not just spoofing the depth, but people around here have dismissed the notion that traders try read the underlying psychology of the market, be it play by play in the order flow, or on a daily level.

When really, this is a HUGE element of most traders strategy.

My biggest gripe, is people (tech or Van Tharp, bet he likes being included in that bracket) dismissing a certain strategy or idea without enough knowledge of how these guys do their thing.

I'm sure Van.K.Tharp is delighted.
Never dismissed just have no need for that style of trading.
Admittedly todays a little tougher.




Just for you Nun.

In relation to first point, that is true. Because then you can take responsibility for your losses and gains, and that's what it's all about sometimes.

In relation to second point, i don't agree with the 2% rule. I think 0.5-1% is far more sensible. What happens if you keep getting stopped out of a trade and you enter again and again? By the time it actually works for you, you're probably down 2% pr even more, therefore you have to make up the 2% regardless of what happens. What if the position never appreciates 2% and you make an overall loss? Perhaps tighter stops are the answer???

This is a reasonable stratagy if you know how to read price and Volume.
The 2% is risk on capital base.
Not 2% of share price.
You need to learn position sizing.

There are times to have much smaller % at risk (Like now).
Personally .25 to 5% is common -- of course this varies from trade to trade as well as intra trade on a position I'll keep adding to.
Some positions will trigger a stop on one or more of the Pyramid trades while other base trades remain open.

There are many ways to be creative with Risk management.

 

[nunthewiser]

Just for you Nun.




.[/B]

um thats lovely tech......... the point being ?

i have a few statements like that dotted around these threads with entry prices /exit prices on them also ...........

what you asked me was for proof of my strategy and to do that i must post traded parcel sizes in statements so you can see how many i bought and how many i kept at what prices to validate my "free carries"

frankly darl that aint gunna happen as pointed out previously MY trade sizes /capital base is no ones concern other than my own and those close to me .....

now i know your Ego may not accept the fact that my strategy works for me and may work for others and it must be wrong because i will not show you my financials . but i spose that is a cross i will have to bear

all the best

 

[tech/a]

I have no problem with vivid imaginations.
Carry on.

 

[nunthewiser]

lol unreal

 

[Aussiest]

This is a reasonable stratagy if you know how to read price and Volume.
The 2% is risk on capital base.
Not 2% of share price.
You need to learn position sizing.

There are times to have much smaller % at risk (Like now).
Personally .25 to 5% is common -- of course this varies from trade to trade as well as intra trade on a position I'll keep adding to.
Some positions will trigger a stop on one or more of the Pyramid trades while other base trades remain open.

There are many ways to be creative with Risk management.

I understand the whole position sizing thing. Eg, if i had 100k trading capital and i wanted to short CBA at 41.90 with a stop at 42.25 (very tight) > 2% of my avail capital = $2,000, therefore i could "sell" 5714 cba shares (maybe about 5700 inc. brokerage). What i don't get is the entry and exit criteria sometimes (support and resistance, yes, but sometimes there is other stuff in there, such as reports, sector related performance etc). That's what we (i) need to learn.

Sorry to OP, a little off topic.

 

[tech/a]

Aussi.

You dont "Need" that info.
Even long term.
Sure you can use it but I dont know zip about any company I'm trading.
All I'm interested in are the numbers.(My trading Numbers).

My tool of trade is shown here and its pretty easy to see the "Obvious" buy and sells. I trade the not so obvious.
Like white diamond single and double print switches.

These are 10 min AIO Charts.
Software is Tradeguider.
Click to expand.

 

[Trembling Hand]

What i don't get is the entry and exit criteria sometimes (support and resistance, yes, but sometimes there is other stuff in there, such as reports, sector related performance etc). That's what we (i) need to learn.

Aussiest you may be over thinking it a tad. I remember a post from you about 3 weeks ago saying its not a good idea to to go long into earning season. I was going to point out then that if you have a signal its a signal.

Maybe a bit of post traumatic stock selection going on??

 

[Aussiest]

Maybe a bit of post traumatic stock selection going on??

Yeah, you're right. I am a bear with a sore head.

Decided to take far more time in identifying set-ups rather than trying to predict where the market is going.

Thanks for the charts tech/a. Will have a better look over them tonight. At a glance, it seems that signals are generated with support or resistance holds. Logical: buy / sell just outside of resistance / support. Stop loss on other side of support / res levels.

You're right though. Just got to concentrate price rather than action. It will either go up, down, or sideways. Just make sure MM is in place.

 

[Frank D]

Eg, if i had 100k trading capital and i wanted to short CBA at 41.90 with a stop at 42.25 (very tight) > 2% of my avail capital
What i don't get is the entry and exit criteria sometimes (support
and resistance, yes, but sometimes there is other stuff in there, such
as reports, sector related performance etc). That's what we (i) need to learn.

Commonwealth Bank Monthly

What you need to learn about is price action, and you don't go shorting
Monthly breakouts in July.

I know you are saying 'shorting' CBA as an example, but because you are saying it probably means you are also thinking of doing it.

Initially my target was $46.55, but now it's 43.32 as dynamics have changed.

43.32 may be the 'top' or it might not, but if you are going to think
about shorting you need to get your 'timing' better and work out
filtering techniques in larger timeframes

I say may not be the top, because I have a target on the Fin index @ 4400
and currently it's only 3934.

I put out a chart a couple of weeks ago on the Financial Index....

https://www.aussiestockforums.com/forums/showthread.php?t=4888&page=333 post #6651

 

[Aussiest]

Commonwealth Bank Monthly

What you need to learn about is price action, and you don't go shorting
Monthly breakouts in July.

I know you are saying 'shorting' CBA as an example, but because you are saying it probably means you are also thinking of doing it.

Thanks Frank D. I don't think i'd be thinking about shorting it until around $44.50. Earlier today, i dropped that level to 41-42 because of resistance at 42, but i think it will push through that given the ferocity of it's rise today. So, yeah, i really only used it as an example at this stage.

Interesting chart by the way. Although, i don't really understand the 50% support concept.

 

[Mr J]

Okay, how about orders for exiting? It seems to me that choosing when to exit is more valuable that where to exit. By that I mean hitting the bid/ask and getting it while you can versus standing in line and hoping someone takes your offer. When I exit, it's because I believe the market will turn on me, so getting out at that point seems to be more valuable than trying to get than extra tick on exit. That tick can make all the difference though, which is why I wouldn't mind some advice.

 

[tech/a]

Okay, how about orders for exiting? It seems to me that choosing when to exit is more valuable that where to exit. By that I mean hitting the bid/ask and getting it while you can versus standing in line and hoping someone takes your offer. When I exit, it's because I believe the market will turn on me, so getting out at that point seems to be more valuable than trying to get than extra tick on exit. That tick can make all the difference though, which is why I wouldn't mind some advice.

In this case J I want to exit when the stock is floundering--not rising so I'll never get the top.--close!
I use a stop limit order as I don't want to be taken out by a heap of sellers at a level which may be common to mine.
Slippage can be a huge concern to me and I took Radges advice after getting hit often when my sell combined with others took out many levels.
Often I had the worst fill,only to see it bounce back instantly to the level I wished to sell at.

No problems now.

My stop will be raised quickly in your above example and I use an hourly chart to do this. The stop will be a tick below an obvious support level on the Hrly chart. Occasionally it will pull away from that level in my favour and that will then become my new trailing stop level for all positions on that trade.

$1.48 is my level for AIO in exactly the situation described above.

 

[edbar]

I use a robotic trading system that allows me to enter a profit goal, and a pullback (trailing stop loss) that kicks in only after reaching my profit goal (so I can ride the profits higher until the stock starts to pullback, then it takes the profit).

There is also a profit protection feature that guarantees me something in case the stock reaches 1/2 of my goal and then starts to pull back. That feature actually locks in more profit as the price goes higher and higher, by shrinking the trailing stop loss the higher the stock goes.

Profit goal: 5%
Pullback after reaching profit goal: .5%
Start Profit Protecting: 2.5%

Also once I have reached my profit goal, it automatically closes my position 15 minutes before the market ends, even if the pullback does not occur.

Cheers,

Ed