Grinding it out, day after day

[Rashid_G.]

Lescor... My first and probably only question..

How do you differentiate chop from trend.. A few chopped trades??

 

[lescor]

Quote from Rashid_G.:

Lescor... My first and probably only question..

How do you differentiate chop from trend.. A few chopped trades??

If I make money it's chop, if I lose money it's trend. Seriously, I don't try to figure it out. If I get a valid entry, I take it.

 

[TheAngryHermit]

Quote from lescor:

If I make money it's chop, if I lose money it's trend. Seriously, I don't try to figure it out. If I get a valid entry, I take it.

Lescor, once a stock hits the ol' two standard deviations do you wait for the stock to change directions before entering? Or do you set a limit order(s) at a level and expect the stock to turn around after you're in?
One thing I have learned thus far is that selling a stock running up against you is idiocy. My reasoning is this: If I put a gun to your head and showed you a chart with only one green candle and told you if you guessed the next candle's color wrong, I would blow your head off, I'm willing to bet you would guess green.
My point is: if you look at any chart, any time frame, any candle, the probability is pretty high that the next candle will be a same color! Why fight the odds? (I'm not saying you are)

 

[Daal]

Quote from TheAngryHermit:

Lescor, once a stock hits the ol' two standard deviations do you wait for the stock to change directions before entering? Or do you set a limit order(s) at a level and expect the stock to turn around after you're in?
One thing I have learned thus far is that selling a stock running up against you is idiocy. My reasoning is this: If I put a gun to your head and showed you a chart with only one green candle and told you if you guessed the next candle's color wrong, I would blow your head off, I'm willing to bet you would guess green.
My point is: if you look at any chart, any time frame, any candle, the probability is pretty high that the next candle will be a same color! Why fight the odds? (I'm not saying you are)

You would be wrong in the case of large cap stocks(such as the S&P500). They are historically mean reverting, a move in a certain direction is more likely to be followed by a move in the opposite direction

 

[makloda]

Quote from Daal:

They are historically mean reverting, a move in a certain direction is more likely to be followed by a move in the opposite direction

IMO this is too general a statement to be correct. Timeframe is key.

 

[Gabfly1]

Quote from lescor:

...Seriously, I don't try to figure it out. If I get a valid entry, I take it.

 

[Daal]

Quote from makloda:

IMO this is too general a statement to be correct. Timeframe is key.

The timeframe that is most relevant to readers of this journal(which I have data) is the daily. the correlation between daily changes in S&P500 futures is negative. If someone has intraday correlation numbers I would love to see it

 

[bro59]

Quote from Dustin:

A funny coincidence that we are making the same argument on the same day in different threads...

Man this guy Dustin is always tooting his own horn.

Come on dude, you know futs is where it's at. Better yet stocks (ETF's) that exploit the inneficiencies in futures.

Should you guys really be exploiting inneficiencies anyway? Isn't that unfair to everybody else?

 

[Dustin]

Quote from bro59:

Man this guy Dustin is always tooting his own horn.

Honk honk, very funny Bo.

 

[lescor]

Pretty mediocre week +4,300 gross 119,000 shrs traded.

Got caught in some ugly healthcare stocks after the republican election win. I anticipated it and adjusted my orders, but not enough I guess. Then the next day I had a software glitch that prevented me from trading my main strategy on what would have been about a +$10k day. Oh well, those things happen in trading. Good volatility the last two days helped make up for it.