| amp39 |
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Gold User, Member, Platinum User, TeleChart
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| Unsure |
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| Thursday, August 24, 2006 |
| Friday, June 29, 2007 11:28:50 AM |
46
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Tell me why?
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May 23, 2007
Apsll’
Yes a picture is better than a thousand words. Thank you for taking the time to post it.
Tobydad,
Thank you I printed this post.
Diceman,
Thanks I have implemented the formula.
BigBlock,
I do appreciate your authority in the trading arena. 15 years in the trances I am sure with many deep scars. Your bullish reactions for the good of humanity is well taken but, please tone it down.
I never mentioned a stock because there was not a specific stock or case that I was asking clarification for. I simply wanted to stimulate a discussion that could have lead to the answer I was seeking. It was great tread and I received a lot of valuable suggestions from some great people, but still not the answer.
Some books state that violating the maximum stop is a cardinal sin. Other state to be flexible. “Maximum” was specifically related to capital conservation. I am told that you should never risk more that a percentage of your total portfolio for every trade. For an example I will use a portfolio of $20,000 and a max loss of 1% per trade in this case would be $200. I buy a stock with good fundamentals “ a good stock” and place my max stop at a % equal to $200, but I bought it at the wrong time let’s say after the news of a good quarter. The price goes up some and then it starts to drop. Buy the end of the day, the price has reached my stop and if I do not change it I will be out. Now because I know is a good stock I rationalize and lower my stop, but I just allowed myself to lose even more money.
So is Maximum stop loss the cutoff point to stop bleeding therefore is rigid? Or can it be flexible based on criteria XYZ. If so which criteria? Maybe the answer I am seeking is in your suggestion?
“If you care enough about your money, you will then take the time to study derivatives” I do not expect you to teach me derivatives, but could you point me in the right direction where to read this subject.
Good luck to you also.
Amp39
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Apsll,
Hey thanks you said it better than I. “You should try a little diplomacy in your interactions with the new traders that are only trying to learn something new”.
I too think that Scottnlena has a good point about using the support level and specially his point “move the stop only when the support is finished”. This forces the trader to wait that a new level is reached before moving the stop. Therefore increasing the chances for greater gains.
Over and out
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Hohnady,
Got it thanks.
Scottnlena,
I like this part
“and it forms another support level i'll move the stop only when the support is finished” Never thought it that way. Thank’s for your contribution.
Diceman,
I like your short and clear explanations of the concepts and thank you for the custom formula; it is neat. Sorry for asking, but how this applies to stops or are you giving me this formula in reference to
Hohnady first posting?
“I am entering a stock that has a history of bouncing off its 13ema, I want to enter as close to the 13 ema as possible. I also want to place a hard stop under the 13 ema.
You are a great teacher
BigBlock,
“The same old song. I have no idea how many times i have seen this same old question.
I have to wonder so, if you are trading, how can you possible have this kind of questions surfacing up. If I was a mechanic, would I be asking - Where do I install the spark plug in the engine or in the exhaust?
BogBlock!
I thought you were a professional. I hope for your sake you are not as sarcastic with your customers on your financial trading site. Also as a professional you should learn how to read carefully before making comments!
I quote:
Other sources claim that a good initial stop is 0.5 % below the lowest low of the previous day or two which ever is the lowest. “ I did not say .5% below the purchase price”.
Your quote:
You mentioned 0.5% stop - I say it will take you out before you blink your eyes. You can expect a trade to breath on that kind of room.
Of course I trade, but I have yet to find one book or two people that agree on this subject. I was not born a mechanic, but if I studied hard I am be able to design a better engine yet. Learning is a never ending process. “It expands the horizon of our mind and enlightens our soul.
Thank any way for your useless contribution on this subject.
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Hohnady,
I tried to use your suggestion on using the SMA to bounce the price off. What time frame do you use? Is it fixed 3 ,6, 12 months?
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Fpetry
Thank you for your explanation.
Quote:
“Then place my stop just underneath the old resistance which is now new support”
Your minimal stop loss is based on which criteria?(price? % volatility? or % of portfolio)
Quote:
How often do you experience (10 %gains)? I was told to take my first 1/3 or 1/2 at (+3%) and then move the stop above buy price to brake even. At best I have had 6 to 10% gains in the total trade with this method. Should I wait longer in my trades? And if so how long do you wait to get to these gains (20 -25%)? If the trade is moving sideway, do you get out and trade a different stock?
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Hohnady
I like your explanation on entry point. How about maximum stop loss? How you set this parameter and how do you set trailing stops when the price goes in your favor?
Thank you
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I have heard conflicting statement about stop losses some claims that it needs to be flexible other claim it is a rigid stop. Now with time while in the trade, a stock will inevitably change based on good or bad news and market sentiment. At present, I am not sure if I should change the initial stop when the price is going against me and approaching a danger zone while at the same time I am convinced that it will go up.
Some source says to set the initial stop at a fixed % from buying price. Other sources claim that a good initial stop is 0.5 % below the lowest low of the previous day or two which ever is the lowest. Recently I came across the posting of Sir Old Viking on Worden’s regarding initial stop relative to fluctuation. Bruce posted various PCFs relative to this subject. I incorporated the PCF with Sir Viking suggestions and got this formula. I currently have adopted this methodology to calculate a stop based on 10 day price volatility.
((((AVGH10 - AVGL10) / 2 + (ABS(H - C1) + ABS(C1 - L) + ABS(H1 - C2) + ABS(C2 - L1) + ABS(H2 - C3) + ABS(C3 - L2) + ABS(H3 - C4) + ABS(C4 - L3) + ABS(H4 - C5) + ABS(C5 - L4) + ABS(H5 - C6) + ABS(C6 - L5) + ABS(H6 - C7) + ABS(C7 - L6) + ABS(H7 - C8) + ABS(C8 - L7) + ABS(H8 - C9) + ABS(C9 - L8) + ABS(H9 - C10) + ABS(C10 - L9)) / 20)*-2)+ C)
Anyone’s comment on the subject of initial stop and trailing stops is appreciated.
Thank you
Amp39
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Hohandy,
Hey thanks for looking into ASTI. I did not buy it after the second consolidation it did not give me the warm feeling that it was going to reverse plus volume seemed very staggered.
I am using Scottrade elite charts and the only indicators I have is price, volume, and roc. I use the 5 min 1 day chart. Or longer time if I need to see past performance. For scanning I use TC2007 the 20, 50 and 250. I look for price crossover and 20 and 50 SMA crossover to bullish. I read Worden’s notes. I don’t use any other indicators. I tried almost all of them, but I get more confused and uncertain. I tried MACD, but it is of no help on intraday.
Thanks
amp
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BigBlock,
Please explain the graph Momentum18,8 and 28,12what does the value [2] and [2.03]represent. Also in the values in the volume [9,375,696] Are you using Blocks to generate this chart?
If this is too much trouble just point me in the right direction
Thank you
Amp
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