Simulated/Hypothetical trades

[tech/a]

This is a short trade?

 

[pavilion103]

This is a short trade?

Yes, short.

 

[simoncar]

Pavilion, you seem like a nice guy so don't take this the wrong way. You have got to stop asking questions of other people and start asking those questions of yourself. I could show you how I would manage that open trade, Tech could show you a different way, Boggo another. Go look at hundreds of charts that have had gap moves....what are the similarities what are the differences. You have got to the work out some form of trade management that would work well MOST of the time. Not just on this AMP trade. If I tell you where I would put my stop and then the next day my stop got hit, you are going to think "well that fool has got no idea". There is more than enough info on the net RE trade management ideas.....go away and test these. Trading profitably is so much about psychology. You only really understand this when you become consistantly profitable I believe. YOU have to design your trading method to allow YOU to feel comfortable trading it. All the time knowing you have a positive expectancy and what the expected max drawdown will be.

 

[pavilion103]

Pavilion, you seem like a nice guy so don't take this the wrong way. You have got to stop asking questions of other people and start asking those questions of yourself. I could show you how I would manage that open trade, Tech could show you a different way, Boggo another. Go look at hundreds of charts that have had gap moves....what are the similarities what are the differences. You have got to the work out some form of trade management that would work well MOST of the time. Not just on this AMP trade. If I tell you where I would put my stop and then the next day my stop got hit, you are going to think "well that fool has got no idea". There is more than enough info on the net RE trade management ideas.....go away and test these. Trading profitably is so much about psychology. You only really understand this when you become consistantly profitable I believe. YOU have to design your trading method to allow YOU to feel comfortable trading it. All the time knowing you have a positive expectancy and what the expected max drawdown will be.

Thanks for the feedback. Appreciated.

Yes I understand that and I am spending many many hours testing all sorts of things. I certainly understand that there are no shortcuts to finding what works best and that everyone has their own opinions based on their own systems which they have developed.

But the benefit for me is if I see a number of experienced, respected people (who have studied many many more scenarios than me) point me in the same direction then it is certainly of value to me (although not a substitute for my own testing). I have learnt and incorporated so much into my trading system from thoughts in this thread.

I appreciate your honest feedback and agree with the value of my own testing above anything else.

 

[tech/a]

Well
My view is that your on the wrong side of the trade.

To me this is a long not short trade.
I'll leave it to you to discover why.
If your interested

 

[joea]

I was hoping to get some thoughts on this one.

I'm not sure where to put stops on a big gap down day like this one. As you can see I have 2 hypothetical trailing stops.

1. One tick above the low of the bar prior to the gap (red)
2. One tick above the high of the bar after the gap (purple

The purple stop doesn't give much room to move. I seem to think the red stop is quite good but would be interested to see people's logic/thoughts.

View attachment 44036

pavilion103.
I do not know what you have read, but Elder has a book titled "The new sell and sell short".
It has a chapter on, Selling on a stop.
It has a chapter, Selling at a target. Selling Engine noise.
It has a chapter, How to sell short.

In the chapter, Selling on a stop, the following are covered.
The Iron Triangle, Market or Limit orders, hard and soft stops,a badplace, reducing slippage, when to use wider stops, moving stops, volatility-drop trailing stops.
Following this it has 50 questions on checking what you have learnt.

The book is about (How to TAKE PROFITS, cut losses,and benefit from price decline.)

Chck it out at amazon or ELDERS site. AMAZON allows you to look at the contents of the book.

just a thought as all your questions are answered.
You my also get it at FISHPOND, but confirm if it is in stock first at FISHPOND.
joea

 

[pavilion103]

pavilion103.
I do not know what you have read, but Elder has a book titled "The new sell and sell short".
It has a chapter on, Selling on a stop.
It has a chapter, Selling at a target. Selling Engine noise.
It has a chapter, How to sell short.

In the chapter, Selling on a stop, the following are covered.
The Iron Triangle, Market or Limit orders, hard and soft stops,a badplace, reducing slippage, when to use wider stops, moving stops, volatility-drop trailing stops.
Following this it has 50 questions on checking what you have learnt.

The book is about (How to TAKE PROFITS, cut losses,and benefit from price decline.)

Chck it out at amazon or ELDERS site. AMAZON allows you to look at the contents of the book.

just a thought as all your questions are answered.
You my also get it at FISHPOND, but confirm if it is in stock first at FISHPOND.
joea

I will definitely get that one then. Coincidently I was actually looking at that last night on Amazon.
I've got his book, "Trading for a Living" but none of his others. I've heard he is excellent.

Thanks

 

[pavilion103]

I just ordered it.

 

[joea]

I just ordered it.

pavilion
Elder has his point to put across. His books are good reading.
He trades in a certain way.
The Share market College education is based on the book you have got and a sofware package called Market Analyser.

Now the point I would like to make is on this forum there are some astute traders.
So if you start with Elder and intergrate some of the comments here I would like to think you will make it.
At the end of the day its "price and volume".
joea

 

[nomore4s]

Don't forget the ASF shop when looking to buy books on investing/trading.

ASF SHOP

 

[pavilion103]

Well
My view is that your on the wrong side of the trade.

To me this is a long not short trade.
I'll leave it to you to discover why.
If your interested

I'm thinking because the gap looks like an exhaustion gap?
There appears to be stopping volume present. A lack of supply is confirmed with a (relatively) low volume test on 11/8.
How does this sound?

 

[tech/a]

Well
My view is that your on the wrong side of the trade.

To me this is a long not short trade.
I'll leave it to you to discover why.
If your interested

but then again.
Short today with a stop on the high of the day isn't such a tardy trade either!

 

[pavilion103]

but then again.
Short today with a stop on the high of the day isn't such a tardy trade either!

Low volume, no demand?

 

[pavilion103]

I'd love some thoughts on this one. Got in yesterday before today's wide spread bar. I only trade end of day so couldn't have done anything about it intra-day.

I don't have much experience with these situations and have placed a stop 1 tick below the high of yesterday's bar. Is this wise? Or is it better to either just exit on open or to give it some more room to move?

The big move was on an announcement (I didn't know there was going to be one, I just used my limited knowledge of VSA to enter).

 

[pavilion103]

Can I please get some thoughts on this one?

First I'd love some opinions as to the quality of my entry.
Secondly, how is the initial stop placement with this? I wasn't sure if I should have had a very tight stop or the current one at 16%. With the current stop there isn't high R:R potential.

 

[pavilion103]

You'll see that this is a chart from Feb 2004. I'm going over historical data and trading bar by bar.

This is the next one. It shot up sharply.

With the 16% stop, this represents an open profit of 2.8R

Price increased 20.8% on this day.


Now my third question is: Where do I exit? After such a sharp rise is it best to take my profit or to simply trail my stop? Volume is looking very strong and consistent.

 

[Billyb]

You'll see that this is a chart from Feb 2004. I'm going over historical data and trading bar by bar.

This is the next one. It shot up sharply.

With the 16% stop, this represents an open profit of 2.8R

Price increased 20.8% on this day.


Now my third question is: Where do I exit? After such a sharp rise is it best to take my profit or to simply trail my stop? Volume is looking very strong and consistent.

View attachment 44838

IMO there is no one answer to this question - it depends on your trading rules. As long as you are sticking to those rules and not just getting out the trade because "I've made a handsome profit for 3 days"

But I like trailing stops because then you are letting the market decide when to get you out of the trade.

Yes 16% is a lot of risk IMO, perhaps you got onto that trade one day too late.

 

[pavilion103]

IMO there is no one answer to this question - it depends on your trading rules. As long as you are sticking to those rules and not just getting out the trade because "I've made a handsome profit for 3 days"

But I like trailing stops because then you are letting the market decide when to get you out of the trade.

Yes 16% is a lot of risk IMO, perhaps you got onto that trade one day too late.

I generally put a trailing stop under a "wide spread bar" but am playing around with my testing to see if there seems to be a good time to exit on close after a big move rather than waiting to be stopped out. Obviously the tradeoff between big potential profits and giving back profit needs to be considered.

I've got a couple of simulators open, placing the same trades but exiting at different points. I will compare them to see if there are any glaring inefficiencies staring me in the face. Obviously I don't want to curve fit though.


And with the 16%, usually I look for risk from anywhere between 4-12%. I need to work out where I am going to place my stops if I choose to take the odd larger risk size trade.

 

[Billyb]

I've got a couple of simulators open, placing the same trades but exiting at different points. I will compare them to see if there are any glaring inefficiencies staring me in the face. Obviously I don't want to curve fit though.

Nice. No doubt you will find something along the way.

 

[tech/a]

The answer is in understanding when a move is going to stall or reverse.
I agree with Billy that there isnt one hard fast rule.
In fact my rules would have seen me out on the next day.(50% of the previous bar)
I would have been only a little worse off had I kept the trade until further analysis gave me strong clues of a reversal.