Place your Stops first?

[laptop1]

Crap Buddist.

When you been trading as long as that guy as, you will know what he means. Fundamentally, anything can happen in the markets, all the guy is doing is, protecting his capital from bad news hitting the market...

Let’s say you placed a trade with no stop first. As soon as you hit the buy button you are filled, at the same time, bad news hits the market; the market without hesitation is tanks!. You stop would have been about 2 S&P points, but you did not place it, you didnt have time... Within seconds the market is down 10 points on bad news, you look at the screen and freeze will you take the 10 point loss.

Ho sh1T it’s now down 15 s&p points. you freeze again and say something like, I wait for a pull back. but the market is now down 20 s&p points.. Remember you did not have time to place the stop! It can happen. if you placed a stop first, you would have made 18 s&p points. it can happen.

What he say makes sense. I cannot see why you cannot grasp it. He is protecting his capital from bad news hitting the market thats all.

 

[Crap Buddist]

Crap Buddist.

When you been trading as long as that guy as, you will know what he means. Fundamentally, anything can happen in the markets, all the guy is doing is, protecting his capital from bad news hitting the market...

Let’s say you placed a trade with no stop first. As soon as you hit the buy button you are filled, at the same time, bad news hits the market; the market without hesitation is tanks!. You stop would have been about 2 S&P points, but you did not place it, you didnt have time... Within seconds the market is down 10 points on bad news, you look at the screen and freeze will you take the 10 point loss.

Ho sh1T it’s now down 15 s&p points. you freeze again and say something like, I wait for a pull back. but the market is now down 20 s&p points.. Remember you did not have time to place the stop! It can happen. if you placed a stop first, you would have made 18 s&p points. it can happen.

What he say makes sense. I cannot see why you cannot grasp it. He is protecting his capital from bad news hitting the market thats all.

yeah i understand that, but his plan the night before was to trade long the market, like he said youve done the analysis the night before, you be going long 410.

the point of teaching rookies, I thought was to get them to learn to trade anticipated direction so clearly he doesnt advocate trading with the market direction ,based on that example, else he would of been short 415/420 yes ? or doesnt he look for that as daytrader ?

I can grasp what hes done with his orders im just querying his late view of things and why short when his plan was for a long ?

Its like it took him ,in that example for the market to trade down 15 points which would of triggered a short although he wanted ,based on his analysis/plan the night before , to trade long.

why should 405 be considered a good sell ? doesnt that suggest that hes hoping for another 10/15 points because he is short? and he still hasnt got a stop loss in for that short trade yet ?
he's in the same situation as having an open position with no stop ,regardless of whether hes long or short?

if the markets trading 407 why cant he use a stop limit buy order @ 410 ,limit say 410.50 and if done assign a stop sell order @ 05 at the same time if he wants to take his long trade ?

 

[tightstops]

yeah i understand that, but his plan the night before was to trade long the market, like he said youve done the analysis the night before, you be going long 410.

the point of teaching rookies, I thought was to get them to learn to trade anticipated direction so clearly he doesnt advocate trading with the market direction ,based on that example, else he would of been short 415/420 yes ? or doesnt he look for that as daytrader ?

I can grasp what hes done with his orders im just querying his late view of things and why short when his plan was for a long ?

Its like it took him ,in that example for the market to trade down 15 points which would of triggered a short although he wanted ,based on his analysis/plan the night before , to trade long.

why should 405 be considered a good sell ? doesnt that suggest that hes hoping for another 10/15 points because he is short? and he still hasnt got a stop loss in for that short trade yet ?
he's in the same situation as having an open position with no stop ,regardless of whether hes long or short?

if the markets trading 407 why cant he use a stop limit buy order @ 410 ,limit say 410.50 and if done assign a stop sell order @ 05 at the same time if he wants to take his long trade ?

flippin heck crap buddhist it was 10 minutes since i saw the clip after reading this feed but it seemed pretty straight forward to me - he wants to buy at 10 his max loss is 5pts(sell at 05) and his profit target is 10pts(sell at 20). but instead of doing it in that order he does the sell first which 99 times out of a hundred wont be filled before hes long at 10 but if it is hell be short which is the direction he wants if the s&p has just lost 5 pts in 10 seconds. advantage is he hasnt just lost a minimum of 5 pts and if he wanted could now create a stop loss for this position for 5 pts getting a free trade. its a no lose situation but one that might only occur once a year or less. never thought of it myself but makes great sense

 

[Splitlink]

Sooo! What else has this guy got to say? Or, maybe, we had better wait until next weekend!

Split

 

[new_trader]

Sooo! What else has this guy got to say? Or, maybe, we had better wait until next weekend!

Split

To be honest, I don't follow his philosophy. Perhaps I need to find out what the OMNI plan is. I agree with his psychology, keeping emotions in check, not moving stops and especially "It's better to be out of the market wishing you were in rather than in the market wishing you were out"

The example he uses to explain why placing a sell stop first isn't very realistic imo, it is aimed at newbies who have absolutely no experience with the markets and take what he says on face value.

He uses the following scenario:

ESM is trading at 1420, you want to BUY @ 1410 with a STOP @ 1405

He doesn't explain the reasoning for placing a BUY order 10 points below the market? If he thinks it will drop down to 1410 why not SHORT the market while it's at 1420?? It doesn't make sense to me at all. Also, if the Market drops 10 points I wouldn't be rushing in with a BUY order. I would rather be on the sidelines waiting to see what develops and then place a Market order either Long or Short. That’s why I think Market orders are much better than STOP or LIMIT orders. (For Trade Entry!)

 

[Splitlink]

To be honest, I don't follow his philosophy. Perhaps I need to find out what the OMNI plan is. I agree with his psychology, keeping emotions in check, not moving stops and especially "It's better to be out of the market wishing you were in rather than in the market wishing you were out"

The example he uses to explain why placing a sell stop first isn't very realistic imo, it is aimed at newbies who have absolutely no experience with the markets and take what he says on face value.

He uses the following scenario:

ESM is trading at 1420, you want to BUY @ 1410 with a STOP @ 1405

He doesn't explain the reasoning for placing a BUY order 10 points below the market? If he thinks it will drop down to 1410 why not SHORT the market while it's at 1420?? It doesn't make sense to me at all. Also, if the Market drops 10 points I wouldn't be rushing in with a BUY order. I would rather be on the sidelines waiting to see what develops and then place a Market order either Long or Short. That’s why I think Market orders are much better than STOP or LIMIT orders.

I'm not a daytrader but I think I follow his reasoning. You plan to buy at 1410 with a stop at 1405, so you put an order to sell where you would want to be stopped out. The stop triggers in on of those quick dropping moves that seem to catch me so often! You find yourself short at 1405 and you could put a trailing stop on, if you had time. What if it went down to 1395 and you had a 5 point trailing stop on? This is all quick stuff for someone like me who trades longer term, but it makes sense. You say why not short while its at 1420? Because you are not expecting it to short--this is an unexpected move that happens a lot of the time and, instead of being stopped out, you have reversed at little risk.

Split

 

[new_trader]

I'm not a daytrader but I think I follow his reasoning. You plan to buy at 1410 with a stop at 1405, so you put an order to sell where you would want to be stopped out. The stop triggers in on of those quick dropping moves that seem to catch me so often! You find yourself short at 1405 and you could put a trailing stop on, if you had time. What if it went down to 1395 and you had a 5 point trailing stop on? This is all quick stuff for someone like me who trades longer term, but it makes sense. You say why not short while its at 1420? Because you are not expecting it to short--this is an unexpected move that happens a lot of the time and, instead of being stopped out, you have reversed at little risk.

Split

Split,

I am a daytrader of the E-mini and those "quick" drops rarely result in a breakdown, so placing a SELL stop first could result in a SHORT trade that suddenly rallies! His reasoning is in case of disaster. If the Market is trading @1420 he would be better of placing a SELL stop @ 1415 with a BUY LIMIT at 1410 and BUY stop @ 1425 with a SELL Limit @ 1430 because basically his trade is from the perspective of someone who isn't certain which way the market is going. If he was sure it would spike down to 1410 he would short @1420, IMHO that is...

 

[Splitlink]

Split,

I am a daytrader of the E-mini and those "quick" drops rarely result in a breakdown, so placing a SELL stop first could result in a SHORT trade that suddenly rallies! His reasoning is in case of disaster. If the Market is trading @1420 he would be better of placing a SELL stop @ 1415 with a BUY LIMIT at 1410 and BUY stop @ 1425 with a SELL Limit @ 1430 because basically his trade is from the perspective of someone who isn't certain which way the market is going. If he was sure it would spike down to 1410 he would short @1420, IMHO that is...

Maybe he is trying to make it easy for the rest us mortals.

Split

 

[new_trader]

Maybe he is trying to make it easy for the rest us mortals.

Split

I'm sure you are being sarcastic

I agree with your view, but if you watch his video again you will note he makes 2 points very clear.

1) Have a plan
2) Stick to your guns

He implies that the 'plan' is developed the night before when all the kids are in bed and you have time to study the market and determine what you will do. So if he plans to BUY @1410 it must be because he thinks it's cheap @1410 but expensive @1420...

If this is the case, what would you do if the market opens around 1420?

If it were me, I'd go short @1420 with a tight stop Then BUY in again @1410 but maybe I have the wrong approach??

 

[Splitlink]

I'm sure you are being sarcastic

I agree with your view, but if you watch his video again you will note he makes 2 points very clear.

1) Have a plan
2) Stick to your guns

He implies that the 'plan' is developed the night before when all the kids are in bed and you have time to study the market and determine what you will do. So if he plans to BUY @1410 it must be because he thinks it's cheap @1410 but expensive @1420...

If this is the case, what would you do if the market opens around 1420?

If it were me, I'd go short @1420 with a tight stop Then BUY in again @1410 but maybe I have the wrong approach??

So you think that it is overbought at 1420? That's the only reason that I would short it. As I said, I'm not a day trader and I know that prices jump up and down. Do you think that it is in a trading range? What if it is breaking upwards. Ok, you are stopped, but if you had put your stop in first at say, 1425, the same would be happening in reverse..

This is an argument that has no end.

 

[new_trader]

So you think that it is overbought at 1420? That's the only reason that I would short it. As I said, I'm not a day trader and I know that prices jump up and down. Do you think that it is in a trading range? What if it is breaking upwards. Ok, you are stopped, but if you had put your stop in first at say, 1425, the same would be happening in reverse..

This is an argument that has no end.

Split,

I agree but Oscar claims to have learned from bitter experience but I can’t see the logic in placing a sell stop first. Placing an electronic order takes milliseconds, a click of your mouse button and it is as good as in the market. He seems to imply that placing an order involves writing an e-mail to your broker:

-------
Dear Mr Broker,

My name is John Doe and I am a customer of yours, my account number is 123456. Would you please be kind enough to BUY 3 ES contracts at 1410? Thank you very much and have a nice day.

-Spell check

-Send
--------------

There are disasters that you don’t hear about on the news that are much more likely to affect most traders on a daily basis than any other - Loss of a connection to your broker. This is why I always place simultaneous orders, especially because I trade at Market with a tight stop. I would like Oscar to give a time and date where the Market has dropped 15 points (Without warning) in less time than it takes to submit a BUY Limit and SELL stop order separately.

In reality, if you wanted to BUY@1410 when the market is @1420 then if it suddenly starts moving down (and you have not heard that a disaster has occured) you would be eager to put your BUY order in 1st because the market is doing what you expected and you wouldn't want to miss out on the opportunity.

 

[tightstops]

Split,

I agree but Oscar claims to have learned from bitter experience but I can’t see the logic in placing a sell stop first. Placing an electronic order takes milliseconds, a click of your mouse button and it is as good as in the market. He seems to imply that placing an order involves writing an e-mail to your broker:

-------
Dear Mr Broker,

My name is John Doe and I am a customer of yours, my account number is 123456. Would you please be kind enough to BUY 3 ES contracts at 1410? Thank you very much and have a nice day.

-Spell check

-Send
--------------

There are disasters that you don’t hear about on the news that are much more likely to affect most traders on a daily basis than any other - Loss of a connection to your broker. This is why I always place simultaneous orders, especially because I trade at Market with a tight stop. I would like Oscar to give a time and date where the Market has dropped 15 points (Without warning) in less time than it takes to submit a BUY Limit and SELL stop order separately.

In reality, if you wanted to BUY@1410 when the market is @1420 then if it suddenly starts moving down (and you have not heard that a disaster has occured) you would be eager to put your BUY order in 1st because the market is doing what you expected and you wouldn't want to miss out on the opportunity.

i dont think hes talking about a 15 point drop more likely in the example the s&p is at 11 hes wanting to be long at 10 but instead of putting order in to buy at 10 first he puts stop/sell in at 5 and then the buy order for 10. if the 5 is filled first hes saved himself 5 pts and is now positioned in right direction - depending on your point of view (youd have to be pretty brave to want to be long this market if 5 pts less before uve had a chance to put a second order in).
of the eminis i only trade the dow but u dont have to look too far back to see this market lose 50 pts (the rough equivalent of 5 in sp)in about 10 seconds it went on to lose a couple more hundred before rallying before the close just a couple of weeks ago. i think hes probably talking about tighter numbers in general tho - say he wants to go long at 6 stop at 5 target 7. i think its a good idea - for 2 years theres no difference then one day u get a free trade that on balance is a winner

 

[new_trader]

i dont think hes talking about a 15 point drop more likely in the example the s&p is at 11 hes wanting to be long at 10 but instead of putting order in to buy at 10 first he puts stop/sell in at 5 and then the buy order for 10. if the 5 is filled first hes saved himself 5 pts and is now positioned in right direction - depending on your point of view (youd have to be pretty brave to want to be long this market if 5 pts less before uve had a chance to put a second order in).
of the eminis i only trade the dow but u dont have to look too far back to see this market lose 50 pts (the rough equivalent of 5 in sp)in about 10 seconds it went on to lose a couple more hundred before rallying before the close just a couple of weeks ago. i think hes probably talking about tighter numbers in general tho - say he wants to go long at 6 stop at 5 target 7. i think its a good idea - for 2 years theres no difference then one day u get a free trade that on balance is a winner

OK, but he doesn't explain his strategy in that way. He clearly says in the video, 1420, 1410 and 1405.

Yes, you are right, the S&P can drop 5 points quickly and just as quickly bounce back up. If a trader intends to be long I can't understand why they would dare put a short order in first. I wouldn't, no way, no how, no why.

 

[Splitlink]

OK, but he doesn't explain his strategy in that way. He clearly says in the video, 1420, 1410 and 1405.

Yes, you are right, the S&P can drop 5 points quickly and just as quickly bounce back up. If a trader intends to be long I can't understand why they would dare put a short order in first. I wouldn't, no way, no how, no why.

Intention to go long at 0930 at 1438, so stop at 1433. Triggered. set new Buy stop at 1438
Intention to go short at 1230 at 1432, so stop at 1437. Triggered set new Sell stop at 1432

This is on the Thursday. and I can see several better ones on Friday.

I'm not saying that they were decisions that you or I would have made. Just that anyone doing that would have ended in profit.

 

[new_trader]

Intention to go long at 0930 at 1438, so stop at 1433. Triggered. set new Buy stop at 1438
Intention to go short at 1230 at 1432, so stop at 1437. Triggered set new Sell stop at 1432

This is on the Thursday. and I can see several better ones on Friday.

I'm not saying that they were decisions that you or I would have made. Just that anyone doing that would have ended in profit.

The timeframe is misleading. We are talking about a 15 point move due to a disaster (not an economic release) between the time it takes to submit 2 orders to your broker. If a trader is so pessimistic that they believe a disaster is just waiting for them to enter a trade then why not be a Short only trader. That way you will make huge profits every time a war breaks out, planes crash into buildings, sailors get kidnapped etc..etc..

I am going to be bold and say flat out that his philosophy is wrong. If you are that cynical then you shouldn’t put ANY orders into the market until you are as confident as can be reasonably expected of it’s direction, then and only then, you should place a MARKET order and stop together.

 

[options]

Oscar has a new vid at his site. In it he trys to clear up what he said about the stop being placed first.

He mentioned some of the boards talking about it over the weekend.

Could that be us do you think?

 

[fibonelli]

Oscar is mentioned on the, ahem, brown board

 

[Crap Buddist]

hmm there must be a way to get the guy long according to his plan..... ive got it,

enter a buy stop order 1 st at 410 when the markets trading below 410, if thats activated the trader will be on the right side of the market AND the right side according to his plan, cos its trading back up, and should enable a sell stop order of 405 then to be assigned when his market orders done with this upside strength to boot.

Now when the markets sub 410 and (if) tanks south through 05, this stategy will keep the trader out of being short cos his analysis and plan was to go long, so no emotional turnover, but it will mean if the 410 is good, then he'll be in as per plan, if it aint ,well nothing lost, better to be out wishing one was in etc, etc,

I like it. problemo solved of how to get the long trader long, without having to be left short and hoping against his considered night before analysis....

 

[Connie Brown]

We're going for a picnic. It's been sunny for days. It's the middle of Summer. The forecast is for good weather. It's never, ever rained on this day ever before. You fully intend to use your sunscreen, sunglasses and sun hat. It's warm. It's going to be a lovely day. There's not a cloud in the sky. Warm and dry.

But you take an umbrella.

Most of the time you're not going to need it. But it costs you nothing to take it. And you'll be one of the very few who look cool on the very odd occasion when you really do need it.

If it does start to rain you can decide whether to stay out without being exposed to this unexpected turn of events protected by your cover or you can decide to go back home - you're (sic) flat.

It's a lot easier to already have an umbrella when it starts to pour than it is to try and buy when when everyone else is.

Does this help?

 

[Splitlink]

We're going for a picnic. It's been sunny for days. It's the middle of Summer. The forecast is for good weather. It's never, ever rained on this day ever before. You fully intend to use your sunscreen, sunglasses and sun hat. It's warm. It's going to be a lovely day. There's not a cloud in the sky. Warm and dry.

But you take an umbrella.

Most of the time you're not going to need it. But it costs you nothing to take it. And you'll be one of the very few who look cool on the very odd occasion when you really do need it.

If it does start to rain you can decide whether to stay out without being exposed to this unexpected turn of events protected by your cover or you can decide to go back home - you're (sic) flat.

It's a lot easier to already have an umbrella when it starts to pour than it is to try and buy when when everyone else is.

Does this help?

It helps me, Connie, thanks.

Split