Keeping It Simple II

[spedblavio]

Quote from dbphoenix:



Drawing any conclusions, much less formulating any hypotheses, is a waste of time on days like this. I stopped early simply because nothing was going on.

--Db

Do you think my entry was premature (and therefore just lucky)?
Having gotten to 16 pts profit and 3 pts from target, it didn't feel to me like nothing was going on!

But I know what you mean, it was a nasty grind and once it pulled back inside yesterday's low, pretty much anything could happen.

 

[dbphoenix]

How you define the opening range is up to you.

--Db

 

[dbphoenix]

GAPS

If one is going to play these, it makes sense, if trading more than one contract, to exit at least one when the gap is filled, since filling the gap is an "event", just as reaching the day's target is an event. This morning, that would result in +10 to +11 pts depending upon entry.

If trading only one contract, there's the question of re-entry in anticipation of further downside. If one just hangs on, this isn't a problem, though one might give back all one's profits and end up at a loss. But if one takes the profits at the gap, then re-entry is just a question of tactics.

--Db

 

[spedblavio]

I was wondering what lesson the market was going to have for me today, maybe that's it.

I've been looking at 5 period weighted MA bands (calculated off highs and lows) for trailing stops after reaching target. Perhaps I'll do the same for filled gaps of decent size.

 

[dbphoenix]

You may find that a trendline will do you more good. When it's breached, the party's generally over. If it's breached before you get to breakeven, it pays to get out immediately, no questions asked.

--Db

 

[pretzel]

Quote from lindq:

I've been trading stocks with success for a couple years, and have been intrigued by all the talk about trading the S&P and the e-mini as a possible complement to my primary system.

Because I like to keep things simple, I was drawn to these threads. But....duh! You folks make space travel look like a cake walk!

If there is so much involved in pulling a few dollars out of trading a single instrument, I think I'll pass.

Or...am I missing something? Is there truly a decent risk/reward ratio here?

lindq,

Your system is definitely more simple than the one discussed here. The complicated part is in the selection of stocks for tracking. And imo, it takes a lot of guts to follow your system (catching a falling knife ?).

BTW, opening bar breakout system here.

pretzel

 

[dbphoenix]

Quote from pretzel:

lindq,

Your system is definitely more simple than the one discussed here. The complicated part is in the selection of stocks for tracking. And imo, it takes a lot of guts to follow your system (catching a falling knife ?).

What system?

--Db

 

[pretzel]

This is one of lindq's system. You can see more lindq-based scripts by doing a search on "lindq" on the Wealth-Lab site.


pretzel

 

[dbphoenix]

And what reason would one have to expect that the 20% stop-losses wouldn't just pile up?

--Db

 

[spedblavio]

Quote from dbphoenix:

You may find that a trendline will do you more good. When it's breached, the party's generally over. If it's breached before you get to breakeven, it pays to get out immediately, no questions asked.

--Db

That makes sense. On Friday it seemed to come out about the same anyway (a full tick breach of the upper 5wma3min band would've stopped me out at 1084.50), assuming you would've drawn a TL perhaps on the 3min starting from the 10:51 bar at the end of the congestion.

I think it might also depend on whether I was specifically playing the gap itself or if I was just using the "gravity boost" as a vehicle to get to BE quickly and be positioned to ride any further continuation.

As far as a TL breach before getting to BE, am I correct that you would not draw a TL until you could do so on the 3min or 5min chart? A somewhat preliminary TL could've been drawn on the 1min not long after entry Friday and would of course have been breached by the morning congestion.