Opposite for me. If my entry was wrong, I want a tight stop to tell me NOW. If my entry was right, I’ll open it up until I have enough room to attach a trailer.
Daytraders, Who Likes Their Stops So Tight They Squeak ?
- Thread starter easymon1
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Opposite for me. If my entry was wrong, I want a tight stop to tell me NOW. If my entry was right, I’ll open it up until I have enough room to attach a trailer.
Suit yourself. Took me years to figure out right entry means nothing if initial stop placement is too tight and takes me out.
Great point.... I'm hedging by usually doing 2-3 trades with a variety of entries and trailing vs hard stops. It took me years to realize it's a numbers game vs big decisions with big risk..
Ummm.... Either your definition of a "right entry" is opposite of what myself and probably others think it means, or your statement makes no sense.
How can it be a "right entry" if the initial stop is hit? Tight, wide, or whatever stop placement adds nothing to determining a "right entry". Stop placement affects trade suitability, affordability/viability, and sizing. Maybe you place your stop, and then figure out what your "right entry" is?
To me, a "right entry" is an entry based on the context of my analysis and signals, with acceptable risk for the then current market environment. Acceptable risk is not determined by the "right entry", although minimal risk would usually be associated with a "right entry".
Although there are many ways a trade can go wrong it takes two parts to make an entry right. Obviously where you enter and where you put your stop. Both matter for the trade initially to work.
In my previous post I meant "right entry" if the stop, which is determined before trade is put on, was placed correctly. If the stop was placed too close and trade is exited then entry was not right because the stop was not right.
In other words if someone can't figure where the right place to locate stop, entering is wrong to begin with. Wishful thinking and all.
I think it's acceptable if you work from some particularly strong market position, which is related to news events. But here you also have to be careful, because in this case certain speculations are possible. Therefore, I would open an order right on the eve of publication of official data to avoid that the market will simply eat your position. In general, I always, under any circumstances, recommend traders to check any approach or theory on a demo, so you can look at the situation from the inside and understand how it works. And in this case it will not be enough just to read an article or a review, it all needs to be tested in practice to determine all the mechanisms and regularities.
How does this work, Ken? How do you set up two trades in the same stock? Can you give me an example? (Thanks.)
Hi, sure. I use OTO conditional orders. Let's say a stock gaps from yesterday close 19.6 to premkt high 21. I'd set up 2 OTO orders:
Buy 50 shares stop 21.3, with hard stop 20.8
Buy 50 shares stop 21.7, with .50 trailing stop
That gives me 2 chances to get a winner, and I use different entries and stop strategies