Stop Losses

[Splitlink]

What if you were long???

But I wasn't long! The world is full of "ifs" , but the argument still exists. That market shot up on sudden news that was not forseeable by the man in the street. In 1 hour FT went up 90 points, at least. All the stops got triggered and that was why it had come all the way back again by 1600.

So we come back to the argument "Where do we put the stops?" My view is "reasonably close, certainly not much further than the volatility suggests because, if there is important, unexpected news, most stops, near and far, will go. Might as well be sooner, rather than later.

Split

 

[new_trader]

But I wasn't long! The world is full of "ifs" , but the argument still exists. That market shot up on sudden news that was not forseeable by the man in the street. In 1 hour FT went up 90 points, at least. All the stops got triggered and that was why it had come all the way back again by 1600.

So we come back to the argument "Where do we put the stops?" My view is "reasonably close, certainly not much further than the volatility suggests because, if there is important, unexpected news, most stops, near and far, will go. Might as well be sooner, rather than later.

Split

You want to know the "funny" thing Split? I didn't find out about the "sudden news" until the end of the trading day. My methodology is sound

EVERYTHING IS KNOWN IN ADVANCE.

 

[firewalker99]

But I wasn't long! The world is full of "ifs" , but the argument still exists. That market shot up on sudden news that was not forseeable by the man in the street.
Split

I don't know about yours, but on my chart the rise occurred exactly at 1330 (GMT+1).
At that time the trade balance figures were released and on Forexfactory this was marked as "potential high volalitity" figure.

So to say this was totally unexpected... In fact, there was already an uptrend in place on the DOW (premarket) which started from the previous day's low. Anyone could see this. If you place your stop below the TL, you would've captured the ride up. Ofcourse, that'll probably be a big IF for most people...

 

[Splitlink]

I don't know, I believe that most of that hour's rise was short covering. That means most of the market was short, or why did it come all the way back in the following hours before picking up again?

 

[firewalker99]

I don't know, I believe that most of that hour's rise was short covering. That means most of the market was short, or why did it come all the way back in the following hours before picking up again?

No, I don't think that was short covering. Why it came back all the way? Buyers taking profit? New traders entering the market after the open and shorting it? I don't know and I don't care. But what I see on the chart is a retracement after a high volume breakout. Price went back to the value area of the previous day and found support there. A selling climax occured and was tested on relatively lower volume. From there it picked up again and continued it's way higher. The rest was just staying in until the trendline broke really, and as this didn't happen there was no reason to exit longs until the close.

 

[gamma]

If you were trading cable or euro and if you had your indicators set up correctly you would have gained handsomely.
If you had a 200-point stop loss it would not have been triggered either. (Provided you were going short only an inexperienced person would have gone long on euro
Even the most basic indicators were pointing to shorting the above not going long on a daily basis.

 

[Splitlink]

Sorry, but I don't see that. Looking at the medium term. I don't believe that there are many bulls in this market, now. There may be a lot of stale ones. Those that left it too late had a heaven sent, second opportunity yesterday to take profits. I, certainly, am more of a portfolio holder than I am a trader. Most of my portfolio was sold long ago and I have no plans, just yet, for buying anew. The market is higher today, but still below what it was last week. We'll see.

Plenty of chances for an intraday trader to make money, though. The secret is direction. As Lee said "What if......"

 

[gamma]

Splitlink,
I am not sure if you are addressing me as I see a lot of comments on the dow here
But if you are and anyone else let me point out a few basic indicators on the euro indicating a sell

Candlesticks A Cross (reversal)
RSI above 70 (reversal)
155 had already been rejected
So no way should anyone have been long
Like today no one should be long again until it breaks yesterday's high and finds some support at 155

 

[Splitlink]

Splitlink,
I am not sure if you are addressing me as I see a lot of comments on the dow here
But if you are and anyone else let me point out a few basic indicators on the euro indicating a sell

Candlesticks A Cross (reversal)
RSI above 70 (reversal)
155 had already been rejected
So no way should anyone have been long
Like today no one should be long again until it breaks yesterday's high and finds some support at 155

No, I was, yesterday, short on SP 500.

I was wrong, the market is ALWAYS right

Split

 

[firewalker99]

Splitlink,
Candlesticks A Cross (reversal)
RSI above 70 (reversal)
155 had already been rejected
So no way should anyone have been long
Like today no one should be long again until it breaks yesterday's high and finds some support at 155

I doubt professional money is looking at RSI or candlesticks to determine whether they want to be long or not.

 

[gamma]

Professional money is a whole different ball game
My reference is to small fry like most of us.

 

[firewalker99]

Sorry, but I don't see that. Looking at the medium term. I don't believe that there are many bulls in this market, now. There may be a lot of stale ones. Those that left it too late had a heaven sent, second opportunity yesterday to take profits. I, certainly, am more of a portfolio holder than I am a trader. Most of my portfolio was sold long ago and I have no plans, just yet, for buying anew. The market is higher today, but still below what it was last week. We'll see.

Either you are a daytrader and you do take notice of the short term trend, or you are a portfolio long term holder and you don't care about intraday swings. Whichever is the case, you mentioned a short 'trade' with what I assume was a short-term target, so whatever is happening in that timeframe is indeed of relevance. Whether there are many bulls or bears in this market is irrelevant in that matter.

 

[Splitlink]

Either you are a daytrader and you do take notice of the short term trend, or you are a portfolio long term holder and you don't care about intraday swings. Whichever is the case, you mentioned a short 'trade' with what I assume was a short-term target, so whatever is happening in that timeframe is indeed of relevance. Whether there are many bulls or bears in this market is irrelevant in that matter.

Sorry, got to go. I'll catch you later.

Split

 

[new_trader]

Professional money is a whole different ball game
My reference is to small fry like most of us.

What?

 

[firewalker99]

Professional money is a whole different ball game
My reference is to small fry like most of us.

Whether you are driving a Lexus or a Volkswagen, in both cases you'll want to reach your destination by following either the shortest or fastest route possible.

 

[new_trader]

Whether you are driving a Lexus or a Volkswagen, in both cases you'll want to reach your destination by following either the shortest or fastest route possible.

Actually, I would have said if you want to win a battle you need to be on the side with the strongest battalions.

 

[firewalker99]

Actually, I would have said if you want to win a battle you need to be on the side with the strongest battalions.

Different wording, but same thing
What would you rather be, heavily armed in the front line on the side with an army of 50 men? Or slightly armed in the middle of the pack of an army with 250 men?

 

[new_trader]

Different wording, but same thing
What would you rather be, heavily armed in the front line on the side with an army of 50 men? Or slightly armed in the middle of the pack of an army with 250 men?

I want to be on the side with a mission, a well laid out plan, and the weapons required to carry it all out. It's good to be on the right side when the bombing begins!

 

[gamma]

What?

When I pointed out a few basics I was told
I doubt professional money is looking at RSI or candlesticks to determine whether they want to be long or not.


I said "professional money is a different ball game"
I obviously do not understand Professional money My remark is made from ignorance rather than knowledge.
But the important thing is those basic indicators work for us with a little non professional
money.

 

[bolts]

true you cant tip several mio on the market and expect to get filled on the tick. Its has to be drip feed in which is why when a CB is active its done over many hours with perfect climbing hourly bars. Small retail dont have that problem most of the time you get the price you want as the broker is counter party not the market. In addition large funds dont spot too often they use options, futures etc to ensure liquidity at the target price.

In forex the top world CB's control 85% of market volume. Large funds about 10% and small spec funds to several mio about 4% and you and other pin money retail 1%.

btw i have euro to 15650 friday. Hope your not short Watch oil!