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Admittedly, much of what I do is based on "feel" but assuming the gap is
up and price is above or near previous day's high, I will generally want
to see the PD high taken out, and then look to enter a) 1/2 position on
an or better order placed to catch a retracement of 1/2 the gap with
stop loss at previous close and b) enter second 1/2 on a stop placed one
tick above the high tick of the morning with stop loss at the low of the
morning. Other variations include watching the high/low for the first
hour and entering on a stop placed above the day high. I will never,
ever chase price which gaps up and continues running without
retracement. Generally, I prefer to enter on retracements using tight
stops. Also, I try to categorize gaps as breakaway or exhaustion based
on the extent of the prior move and I don't fiddle with anything I think
is an exhaustion gap.
Bottom line, I don't mind missing out on profits from a prospective
trade which is questionable.
Earl
----- Original Message -----
From: <JAC1390@xxxxxxx>
To: <realtraders@xxxxxxxxxxxxxxx>
Cc: <realtraders@xxxxxxxxxxxxxxx>
Sent: Tuesday, January 25, 2000 10:32 AM
Subject: [RT] ENTRY METHODS
> I know it is a very personal matter with regard to risk
tolerance,personality
> etc.
>
> I was just wondering if thread can share entry ideas.
>
> REASON: I have successfully developed screening techniques that I feel
> comfortable with but... I am missing a great number of these trades
because;
> one,I do not use market orders on the open and two,it appears that the
> greatest majority of my screens gap open,thus, even though they have
> continued up at what level do you determine to pay up on the open?
> The risk of just going in is that the move that got me in may be
exhausted
> and I now pay at the high end of the gap.Even using Bollinger Bands,
> channels, and trenlines do not seem to provide me with answer.
>
> Any ideas???
>
>
>
>
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