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Registered User
Joined: 10/26/2005
Posts: 238
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I am on my second year of learning how to trade, I have created a system of picking stocks that seems to work well. Where I have the biggest problem is getting into a trade. example this morning I had COGO on my buy list, it closed yesterday at $11.27. while I debated with myself and watching it on level 2 on when to buy today it steadly rose all day to $12.00. Since My plan is to hold a stock for a few days or a week should I even look at the intraday charts and level two ? Or just set my entry point the night before and stick to my plan?
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Registered User
Joined: 8/27/2006
Posts: 74
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So you are a swing/core trader just like I. Well first I would like to ask who is your broker?
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Registered User
Joined: 1/28/2005
Posts: 6,049
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allenbary
Every entry exit method has its pro's and cons. I have found diversification
the best tool to use in trading.
Not only a diversification of holdings but a diversification of timeframes
and trading methods.
Some of my methods require me to hold short-term. Some long-term.
Some require me to buy strength. Some require me to buy weakness/value.
You will find when you diversify your methods it evens out equity.
When we trade one way. You will find times when it is successful and time when its not.
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Some things to look into relative to a stock like COGO.
(all my references are to daily charts)
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8/30/06 was an isolated low (its low was the lowest and the 2
bars on either side of it had higher lows)
A typ. entry would be a buy stop just above the 8/31/06 high.
With a stop loss at the isolated low.
Some would use 10 cents to 25 cents above. Some would use
Previous (H-L)*.25 added to the previous high.
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Bar strength:
If we consider a close exactly between the high and low as 50%.
(High=12,Low=10,close=11)
If the 5 day average bar strength is less the 40%
We buy at the market the next day.
We sell the position if the Bar strength (5 day average) goes
above 60% on a close.
Unload at the market the next day.
Because this is a "counter trend system" I like to use this on stock trending up.
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Other methods:
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MACD histogram 12,26,9 up-turn when below zero
Buy order above the high
(you would have entered at yesterdays high)
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MACD histogram goes above zero.
Buy at open
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RSI (14 to 21 length)
Goes below 20.
Enter at market
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Dual-MAV cross
Short-term MAV crosses a Longer term mav.
Any lengths from 3/6 to 3/11 to 5/20
we enter at market the next day.
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Stochastic or RSI moves from below 50 to above 50
(length from 14 to 21)
We enter at market the next day
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As you can see there are many methods. I have found it best
to use a broad combination of them. Some trend, some counter trend.
Some buy at open, Some require a "trigger". Some buy strength
some buy weakness.
I have tested many methods and systems over long periods of time and
have always found results and risk improve. When you diversify your
system and methods.
Imagine you have a short-term trader who is successful and an
intermediate trader who is successful. If they combined their
systems it would probably smooth out their equity curve.
Whenever we trade "one-way" we "risk: that it will fail.
Thanks
diceman
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Registered User
Joined: 8/27/2006
Posts: 74
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What about entering in the day, using intraday charts?
When I have a stock in mind ready to trade, I use a 5 min, 20 and 40 MA, and a overbought/ oversold indicator. I would enter in the trade that day, about 9:45 am or later in the day depending on volume and of course will buy in oversold territory and a bounce of the 20 MA.
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Registered User
Joined: 8/27/2006
Posts: 74
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Diceman, how long have you been trading?
You have posted very intrestiong methods
Thanks
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Registered User
Joined: 3/9/2005
Posts: 71
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Sell into a rally.
Buy them when they are not wanted.
Enter a stock when institutes are now buying them.
The clock always comes back to 12:00.
Whatever the cons of CNBC are saying, it likely is a typical lie and the opposite of what they mumble is the results.
Are the stocs low? On the weelky & daily? Then that may help target entry point to long an issue.
What does the VIX say?
Low you go high you buy.
Remember, every reason to buy or short a stock is valid, to the participant.
But, the institutes with the big wallet move it for "whatever" reason they want to!
Follow what they are doing and forget the rest of what you hear, it's all noise...
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Registered User
Joined: 7/8/2006
Posts: 20
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How a level 2 platform works? is it a good instrument to spot timing to jump in?
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Registered User
Joined: 8/27/2006
Posts: 74
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Level 2 is mostly use by daytraders.
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Registered User
Joined: 7/8/2006
Posts: 20
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do you know how it works and how it affect prices in real term?
I am using it along with other indicators to see how institutions or private investors affect prices by matching bids and offers.
but i have to admit that it is unknown to me what s behind it..
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Registered User
Joined: 10/26/2005
Posts: 238
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Thanks everyone for your comments. Diceman I always find your comments of value. I look for swings or trend revirsals, lately I missed several moves trying to dicide were to buy. Once the stock starts to move I start thinking "am I to late, am I chasing the stock" When I first started trading last year. I made the misstake of buying when the stock chart "looked good" only to find the market makers were just waiting for me to place my order to buy so they could start droping the price. "HAHA" at least that is what it seamed like. I learned alot since then. Epineirojr I use MB Trading mostly sometimes Scottrade.
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Registered User
Joined: 3/25/2005
Posts: 864
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QUOTE (allenbary) I made the misstake of buying when the stock chart "looked good" only to find the market makers were just waiting for me to place my order to buy so they could start droping the price. "
You just don't know how true this statement can really be
when you enter your trades using market orders. Never do that.
Always enter using limit orders. Always.
Market Makers will eat you market-order guys for lunch everytime
because you are their primary targets. They see ya comin.
With limit orders, you are flying under the radar.
Also, one method that I use for entry into daytrade orders
is to look for the first double bottom on a 1 minute chart
immediately after the market opens. The double bottom will
be comprised of two adjacent bars where each of their lows
are no more than .06 to .08 apart and where the first bar
is red and the second bar is green. Mind you, this is a
method I use sometimes for daytrading entries, not 2 week
holds.
Hope all of this helps.
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Registered User
Joined: 7/8/2006
Posts: 20
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I agree on placing limit orders "to fly under the radar" although this strategy might work well after 1 hour of the market opening to avoid beeing whipped by short liquidity and weakness both hallmarks of a market just awaken.
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