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An
interesting application of stop loss I used last year at the suggestion of
someone else was as follows:
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Use
QQQ for example.
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You
believe QQQ will have the familiar opening up and then reverse to a down
trend.
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It
closed yesterday at $25.00. You want to sell short it if it goes down. You want
to sell short as high as possible, but only after a down
movement.
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Before
the market opens, you place a stop limit sell short order as
follows:
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stop
$25.25 (order ignored unless price rises to $25.25)
Limit
$25.00 (if price drops back to $25, heading down, your order becomes a Market
order to sell short at $25.)
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This
would be better than placing just a sell at $25 because if you are wrong and the
trend is up, your short sell position would go against you.
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Have
others used this technique? It is probably common practice.
Rik RasmussenStock Analyzer mailing list moderator<A
href=""
target=_blank>http://groups.yahoo.com/group/stockanalyzer/
<BLOCKQUOTE
>
<FONT face=Tahoma
size=2>-----Original Message-----From: Jayson
[mailto:jcasavant@xxxxxxxxxxxx]Sent: Sunday, February 23, 2003
11:53 PMTo: amibroker@xxxxxxxxxxxxxxxSubject: RE:
[amibroker] Re: cannot buy on open
<SPAN
class=010294804-24022003>Phsst,
<SPAN
class=010294804-24022003>
I
think that is just called a stop limit order, where the stop is activated at a
given price but the sell (or buy) price is limited. A stop market order
converts to a simple market order once the stop price is
hit...
Jayson
<FONT face=Tahoma
size=2>-----Original Message-----From: Phsst
<phsst@xxxxxxxxx> [mailto:phsst@xxxxxxxxx]Sent: Sunday,
February 23, 2003 11:38 PMTo:
amibroker@xxxxxxxxxxxxxxxSubject: [amibroker] Re: cannot buy on
open> No, a trailing stop loss order AUTOMATICALLY
adjust the stop priceby a given percent or value example 5% or .50 cents.
This is differentfrom entering a stop order and making changes your
self......>OK... exception noted.So what do they NOW call
the process of manually adjusting the stopprice in order to obtain more
granular individual trading rulepreferences?Just
curious.Phsst--- In amibroker@xxxxxxxxxxxxxxx, "Jayson"
<jcasavant@xxxx> wrote:> No, a trailing stop loss order
AUTOMATICALLY adjust the stop price by a> given percent or value
example 5% or .50 cents. This is different from> entering a stop order
and making changes your self......> > Jayson>
-----Original Message-----> From: Phsst <phsst@xxxx>
[mailto:phsst@xxxx]> Sent: Sunday, February 23, 2003 10:21 PM>
To: amibroker@xxxxxxxxxxxxxxx> Subject: [amibroker] Re: cannot buy on
open> > > Guess I'm confused.> > One of the
followup msgs to this thread stated that Scottrade did not> support
trailing stop loss orders.> > Trailing stop loss orders are
nothing more than STOP orders with a> price specified that will trigger
if the security trades against the> position and through the STOP
price. It is referred to as a 'Trailing'> Stop Loss order when you
peridically change the specified Stop price> to 'Trail' the price
action of the stock price to either limit losses> or protect
gains.> > Backtesting software simulates the manual adjustments
that must be> made regurlarly to Stop prices for trailing stop loss
purposes.> > Is this one of those 'teach an old dog new tricks'
thingy's?> > Phsst> > --- In
amibroker@xxxxxxxxxxxxxxx, "Richard Harper"
<rdharper@xxxx>wrote:> > Phsst;> >> >
Here is the appropriate help section from the live screen:> > What
is a stop or a stop-limit?> >> > Stop Order is a buy or
sell order which automatically converts to a> market order and will buy
and sell securities at the current MARKET> price once the order is
triggered by the stop price. For OTC orders,> a stop order
becomes a market order if either scenario takes place.> The stock is
quoted (bid for sell stops and ask for buy stops) at your> stop price
or actually trades at or through the stop price. For> listed
stocks a customer is entitled to the next sale on the primary> market
when the price trades at the stop price, providing there are> enough
shares available at that price.> > A stop order may be a day order
or a good til cancel order. A limit> order is not the same type
of order as a stop order. Buy stop orders> are placed above the
current offering price and sell stop orders are> placed below the
current bid price. A stop order gives you the> opportunity to
protect a profit or limit a loss on a security already>
purchased. Be aware that significant, short term market movements
may> trigger your stop order, creating an undesired/unwanted buy or
sell.> Also, depending on market conditions and the fact that your
order is a> market order, once triggered, there is no guarantee of what
price it> will be executed at and can be several points away from the
stop price.> >> > Stop Limit Order is an order to buy or
sell a security at a> specified price or better (stop limit price), but
only after a given> stop price has been reached or passed. It is
a combination of a stop> order and a limit order. A stop limit
order may be a day order or a> good til cancel order. Unlike a
stop order which converts to a market> order once order is triggered by
the stop price, a stop limit order> would only be executed at the limit
price or better. As with any> order limited by price, the risk is
that you have the opportunity that> your order would not be executed if
the market price does not reach> the limit.> >> >
Stop Orders and Stop Limit Orders are handled differently by the>
exchanges and are considered "not held" orders. No priority is
given> to these orders and you may not be executed, even if the stock
is> trading at your price.> >> > ***NOTE:
Stop orders must be placed at least .25 of a point below> the current
bid or above the current ask. We have established this> guideline
due to the possibility of the order being invalid if the> market price
moves below the designated sell stop price or above the> buy stop
price.> >> > ----- Original Message
-----> > From: Phsst <phsst@xxxx>>
> To: amibroker@xxxxxxxxxxxxxxx> > Sent:
Sunday, February 23, 2003 5:16 PM> > Subject:
[amibroker] Re: cannot buy on open> >> >>
> <<Scottrade supports all but Mkt on Close, End of Week,
End ofMonth.> > Nor trailing stops, the thing I'd
like to see added next. Theothers> > are
supported.>>> >> > I looked at the demo
Scottrade online trade entry screen. It allows> > you to
enter a Sell... Stop... GTC... order on an existing Long>
> position, or a Buy to Cover... Stop... GTC order on an
existingShort> > position. What the demo trade entry
screen did not show was how to> > specify a Stop Price
at which to execute the order.> >> > If a
price specifier is available under the live trading system,then>
> that is all you would need to implement Stop Loss orders, and
then> > make them trailing by manually adjusting the
Stop Price nightly or> > periodically.>
>> > Hard to believe that Scottrade does not allow
you to specify a Stop> > Price in the order entry
screen.> >> > Phsst> >>
> --- In amibroker@xxxxxxxxxxxxxxx, "Richard Harper"
<rdharper@xxxx>> wrote:> > >
Phsst;> > >> > > Scottrade
supports all but Mkt on Close, End of Week, End ofMonth.>
> Nor trailing stops, the thing I'd like to see added
next. Theothers> > are supported.>
> >> > > Richard>
> > ----- Original Message ----->
> > From: Phsst <phsst@xxxx>>
> > To: amibroker@xxxxxxxxxxxxxxx>
> > Sent: Sunday, February 23, 2003 9:08
AM> > > Subject: [amibroker] Re: cannot
buy on open> > >> >
>> > > <<Would you mind sharing
the name of the broker you use to> place these> >
> orders?> > > I do not
think I can do this with my current broker,Scottrade.>>>
> >> > > Almost all
brokers support the orders I use... Datek, RJT,ETrade,>
> > AmeriTrade, etc. The Order parameters from
Ameritrade include:> > >> >
> Position - Buy, Sell, Sell Short, Cover>
> > Terms - Market, Limit,
Stop, Stop Limit> > > Good For - Day,
GTC, Mkt on Close, End of Week, End of Month,> >
>
Good ThroughDate> > > Special - All
or None, Do not Reduce, Fill or Kill,> > >>
> > I rarely trade during the day, preferring to
make my trading> decisions> > >
using EOD data and placing those orders online that night for> next
day> > > automatic execution.>
> >> > > Each night I
review all open positions and manually place (or> adjust)>
> > trailing stop loss orders using 'Sell' /
'Stop' orders. Iuse GTC> > > orders
for stop loss purposes so that if I happen to be away> for a
day> > > or more, then I have absolute
protection even though I may not> have> >
> 'tweaked' the trailing limit price.> >
>> > > Nothing fancy.>
> >> > > But I want my
backtesting software to be able to simulate all> of the>
> > available EOD Order stradegies from within
code or AFL without> having> > >
to change parameter settings from a Settings window every time> I
want> > > to test a new
combination.> > >> >
> Phsst> > >> >
>> > > --- In
amibroker@xxxxxxxxxxxxxxx, "Rik Rasmussen"> >
<hrasmussen@xxxx> wrote:> > > >
Phsst,> > > >> >
> > Would you mind sharing the name of the broker you use
to> place these> > >
orders?> > > > I do not think I can do
this with my current broker,Scottrade.> >
> >> > > > Rik
Rasmussen> > > >>
> > >> >
> > > -----Original Message-----> >
> > > From: Phsst <phsst@xxxx>
[mailto:phsst@xxxx]> > > > > Sent:
Sunday, February 23, 2003 12:00 AM> > >
> > To: amibroker@xxxxxxxxxxxxxxx> >
> > > Subject: [amibroker] Re: cannot buy on open>
> > > >> >
> > >> > > > >
Yuki,> > > > >>
> > > > I've read the previous posts on
this subject and feel the> need to> >
> > > contribute to your side of the issue:>
> > > >> >
> > > AB is almost bulletproof on the technical
indicators and> triggers> > > >
> needed to initiate backtest trades...> >
> > >> > > > >
HOWEVER, I find that the ENTRY / EXIT stradegies of ABare not>
> > > > intuitive, and that a good bit of
'tweaking' and'testing' is> > > >
> necessary to even attempt to come close to real-world> orders
for> > > > > entry/exit positions
of securities.> > > > >>
> > > > For example, for years I have
traded certain strategies as> > follows:>
> > > >> >
> > > After hours Buy or Short Limit order @ todays (EOD)
close or> > "BETTER @> >
> > > OPEN".> > >
> >> > > > > No StopLoss
entered on day of order entry execution.> >
> > >> > > > >
After Mkt closes on day of order execution (and each day>
> > > > thereafter)... place trailing stop
loss order .10cents above> > or below>
> > > > todays high or low (only if new
stop moves in direction of> > position).>
> > > >> >
> > > The above has been a successful strategy with my
own> backtesting> > > > >
software and actual trading discipline.> >
> > >> > > > >
I cannot figure out how to accomplish the above in AB.>
> > > >> >
> > > And if folks are tolerant, I think I can come up
with some> other> > > > >
situations that have eluded me in past AB backtests thatI can>
> > > > accomplish with my own
software.> > > > >>
> > > > And for those who wonder why I
fool around with AB... TJ has> > done an>
> > > > unbelievable job on the many
technical indicators that are> > needed to>
> > > > setup entry and exit signals that
my own software is not> > capable of.>
> > > >> >
> > > I tend to still rely upon my own backtesting
(called> 'SIM') for> > > > >
verification of real trading stradegies, but only because I>
> haven't> > > > >
figured out the more esoteric issues of AB Order/Entryissues.>
> > > >> >
> > > Regards,> > >
> >> > > > > Phsst>
> >> > >> >
> Yahoo! Groups
Sponsor> >
>
ADVERTISEMENT> > >> >
>> > >> > >>
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