GladiatorX
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On stop losses
- I'm a day trader primarily. I use a daily loss limit stop loss. I never let it get hit; Its basically the most i am willing to lose on any particular day; Apart from that, i trust myself to act decisively and objectively to exits, adapt to market conditions and take appropriate actions as to both targets and losses. For me; A specific price MAY NOT invalidate my reasons for entering, therefore it can be hard to identify exactly where i want to exit; Hence, i monitor price and constantly change my target and exit to suit the changing market environment.
- Not using a stop loss is fine (I'm talking unleveraged) as long as you trust yourself to act decisively and appropriately to changing market conditions and exits. If you need a certain Number to tell you to get out, fine... Its not neccesarily the best exit though; a number... Not everyones trades are based on price not hitting X. Just because its the norm for your reasons for exit to be price FALLING; doesn't mean that has to be your exit; For example a few exits i take
When price becomes flat after i expected momentum, i exit.
I also have a profit target in my head that i'm 'happy with', which is 1 point in the ES,
if i am uncertain about price and i have +1 point profit, i'll take it immediately.
If price starts falling with momentum, miles away from my stop, i'll exit.
If volatility is low and i'm 'waiting around'
It doesn't have to be a certain price; You can exit for other reasons...
- If price is falling towards your stop and you, i hear people say this all the time, ' Think my stop loss is going to get hit' get the **** out .... Why are you still in? If you don't trust yourself, then who can you trust to make decisions for your money? No1.
Just a few ideas ^
Just saying there is more ways to exit than 'When price has fallen a certain distance'.
- As for your S&P 500 stop loss; Let me show you a chart...
I'm showing you to old contract month, but thats just because i haven't done the H0 contract analysis yet.
This isn't uncommon behaviour; its a ranging market; The S&P 500 has been notorious for years for having false breakouts... or ' Stop runs ' - Its always done that; Like 20 years.
So you can see that the 1085.00 level, is where price has continually bounced from & spiked through.
1. By the time price has started Falling towards 85 - don't you think you should be out by then? Won't you know by then that it wasn't the momentum you thought? Shouldn't you be exiting? - Or not, which is fine.
2. Look at the 85, its the Support level, thats probably where i'd personally look to go long, your exiting @ the bottom of the cycle.
3. 85 has been spiked over and over, price keeps going over it. So if you place your stop loss there, you'll MOST LIKELY, be stopped out and then price will turn around - Its not bots. Thats the market. Your part of the psychological cycle where you buy high and price turns, you sell low and price turns... Thats how the markets work when your waiting for 'confirmation' on entries.
One thing about most market participants that contributes to losing is that
1. They wait for confirmation = Too late. Top of the cycle. Late buyer.
2. They exit after a large fall = Late seller. Low of the cycle
So they are forever buying the high and selling the low ... Because by the time they sell, everyone else has sold and so there is no more supply etc etc etc ... In general; IMO - You want to BUY falling price; Which is kinda what your doing so thats good, but your waiting for confirmation, your waiting for a 'Breakout of a pennant' Your buying the high of the cycle... If your going to buy falling price, if your going to take that risk. Why not do it properly?
Here is a chart of the S&P 500 ETF (SPY) from 1994 -
You can see
1. The market was choppy then, lots of faking, loads of up moves and then down moves and fades... Choppiness, 'pretends', stop runs... All that fo' shizzle.
Have a good look at it; Its the same as now. If anything; them markets are even more choppier than now when you think of the smooth uptrend we are currently having.
Thats a RANGING MARKET
Here is a chart of the SPY in 1995 One year later;
TRENDING MARKET
Here is a chart of the SPY in 2000;
RANGING MARKET
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robster970
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FWIW, you'll get creamed on E-mini if you don't have a good fundamental view and you're swing trading.
S&P futures tend to lead, not lag their underlying. Take yesterday as an example. Price moved up significantly from 7am through to market open. It was a big gap up so why didn't the gap get filled durign regular hrs and a tight range occurred? Did you look at pre-market volume? Were the big boys positioning themselves for the news that came later in the day. Did the retailers get a look in? What do you think is going to happen today after 1.30pm?
These are all things that should determine your entries, exits, stops, position sizing, scaling. Not specifically what you see on the chart. That's what I think the guys are trying to say here. Basing your decision making purely on TA is a good way to get beaten up trading an instrument that is goverened by fundamentals of the world.
GladiatorX
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You trading the 1.30pm today?
piker
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This rallly is based on weak usd according to an overwhelming amount of analysts, so what have fundamentals of stocks within the index have to do with its oscillations/trend? On the other hand world markets also rallied, why is that? I am being cynical, no offense, there are a million opinions out there, real fundamentals whatever they are in price performance, stronger hands take it where it is meant to go, hence I try only to trade with a trend & not fundamental interpretations.
robster970
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I'm already in on a longer term trade but will see whether there is a gap play today. Looking at the way price has drifted today I wouldn't be suprised if todays gap got filled. I'd be suprised if yesterdays gap got filled as well though.
B
Black Swan
Rob was it you I was discussing Street Smarts with last week? If so could you pm me with your e-mail addy?
TIA
B
Black Swan
makes it sound like a race, kind of lingo they must use on the Paddy Power forums..
B
Black Swan
fwiw I'm also long on EUR/USD, since 8am on the 9th...
closed for 50 pip profit...
robster970
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It wasn't but I remember the thread and thinking I wouldn't mind reading it. I'll PM you my e-mail anyway.
As for me and Gladys, we've occassionally been in serious dialogue about e-mini over the last couple of weeks, namely concerning the need to understand fundamentals in order to trade effectively. He's also bee on the receiving end of some of my spookily correct calls which for the record, have deserted me completely this week.
Incidentally I referred to him once as being a friend which I now vehemently deny.
B
Black Swan
GladiatorX
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I'm with a commision-payed broker; Its actually what he emailed me yesterday hoping for some commisions. I think he was joking; but as always, there was a hint of seriousness ofcourse. As with any joke.makes it sound like a race, kind of lingo they must use on the Paddy Power forums..
GladiatorX
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I wrote it down in my diary. Anyway; I must now concentrate or i will forever mourn this day.
GladiatorX
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Read it and weep boys. Yours truely scored 11 ticks.
timsk
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Lots of interesting stuff being posted but, as this is piker's journal, can I be really radical and urge everyone to keep the focus on him and tailor their posts towards helping him achieve his objectives. I realise that's a tad hard at the moment as he's not (yet) told us what it is that he's trying to, but I'm sure you get the general idea . . .
robster970
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That was actually quite entertaining to watch. Good work. You finished for the day now or are you going to trade the gap?
@Timsk - by demonstrating how we all differ in trading styles yet all rely on an incorporation of fundamentals maybe Piker will then start to evolve with his plan, whatever it may be.
piker
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1. Which markets will you focus on and why?
2. Which instruments will you trade and why?
Anything that trends, has sufficient liquidity, can be traded 24 hours
3. Which timeframes will you use and why? (e.g. daily TF to determine primary trend, key S&R areas etc., and hourly TF for entry and stops etc.)
Trend is monitored on weekly & daily charts via trend lines. Horizontal support & resistance levels are taken from weekly chart. Entries are taken from 4 hour chart in form of a divergence in line with the main trend (weekly is in uptrend I will wait for strengthening price action on 4 hour chart). I will be more strict on entries as I have a tendency to enter after an oscillator goes green, but not the price. So from now on I am planning to wait for oscillator to put in a signal and price to break current reaction level on 4 hour chart. Stops, that is what I really need help with, are currently used from current reaction levels, as evident from current posted trade's charts.
4. Which is your basic objective, i.e. are you wanting to trade breakouts, retracements or reversals?
I plan to trade with a predominant trend on weekly chart. I will wait for a pullback & enter using 4 hour chart. I plan to do this until the time a major level is broken on weekly chart.
5. What is your trade set up - as opposed to the trade entry trigger? E.g. price breaks out above / below yesterday's high / low, then pulls back to it and finds support / resistance.
Example: Weekly in uptrend.
a) Price pulls back to either a horizontal or diagonal support zone;
b) MACD on 4 hour chart starts to rise creating narrower gaps between the average & signal, a typical example of pattern I am looking for is in the gold's chart that I posted. It signals entry when historgam registers 1 green bar above centre line.
c) Price on 4 hour chart either diverges from MACD or puts in a multi bottom or puts in a series of higher lows higher highs;
d) Price on 4 hour chart breaks current reaction high.
If and when above conditions are met I go long.
2. Which instruments will you trade and why?
Anything that trends, has sufficient liquidity, can be traded 24 hours
3. Which timeframes will you use and why? (e.g. daily TF to determine primary trend, key S&R areas etc., and hourly TF for entry and stops etc.)
Trend is monitored on weekly & daily charts via trend lines. Horizontal support & resistance levels are taken from weekly chart. Entries are taken from 4 hour chart in form of a divergence in line with the main trend (weekly is in uptrend I will wait for strengthening price action on 4 hour chart). I will be more strict on entries as I have a tendency to enter after an oscillator goes green, but not the price. So from now on I am planning to wait for oscillator to put in a signal and price to break current reaction level on 4 hour chart. Stops, that is what I really need help with, are currently used from current reaction levels, as evident from current posted trade's charts.
4. Which is your basic objective, i.e. are you wanting to trade breakouts, retracements or reversals?
I plan to trade with a predominant trend on weekly chart. I will wait for a pullback & enter using 4 hour chart. I plan to do this until the time a major level is broken on weekly chart.
5. What is your trade set up - as opposed to the trade entry trigger? E.g. price breaks out above / below yesterday's high / low, then pulls back to it and finds support / resistance.
Example: Weekly in uptrend.
a) Price pulls back to either a horizontal or diagonal support zone;
b) MACD on 4 hour chart starts to rise creating narrower gaps between the average & signal, a typical example of pattern I am looking for is in the gold's chart that I posted. It signals entry when historgam registers 1 green bar above centre line.
c) Price on 4 hour chart either diverges from MACD or puts in a multi bottom or puts in a series of higher lows higher highs;
d) Price on 4 hour chart breaks current reaction high.
If and when above conditions are met I go long.
GladiatorX
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Thats me done 50 trades this month.... Trying to overload so i don't feel the urge to trade during Christmas.
Finished for the day; except i need to manage a Japanese ETF i'm in, which was annoying because i had a limit order after market hours last night to get filled, but only some of it got filled. So now i'm 1/3 in and the asian session overnight has gone higher so i think i've missed my chance. Suppose its win;win;
If it falls, i can get my fill. If it rises, its a win.
