Momentum and Trend Trading entries

apo99 · Feb 7, 2017

Momentum and Trend Trading entries

Hey Guys,

I have been looking to build a strategy for a while that targets small cap stocks mostly under $5. Everything I’m looking at is quite bullish; RSI between 60-100.

So it’s basically a cross between a momentum strategy and a trend trading system. My holding periods are quite short 2-8 days. Now I’m struggling with my entries, I don’t know if I should be entering on a small pullback or jump in like a momentum play, if anyone would have some insight it would be greatly appreciated.

Apo

Jones75 · Feb 7, 2017

apo99 said:
Momentum and Trend Trading entries

Hey Guys,

I have been looking to build a strategy for a while that targets small cap stocks mostly under $5. Everything I’m looking at is quite bullish; RSI between 60-100.

So it’s basically a cross between a momentum strategy and a trend trading system. My holding periods are quite short 2-8 days. Now I’m struggling with my entries, I don’t know if I should be entering on a small pullback or jump in like a momentum play, if anyone would have some insight it would be greatly appreciated.

Apo

If you want to buy, say 10,000 shares, leg in with tranches of maybe 2,000 each. Otherwise if you bought the whole amount at once, and the stock goes south :banghead:

, well you know the rest.

In fact, say you had done three leg ins, and things kept going south

, but your research indicated this was an aberration, then long dated call options can come into play if the criteria meets your standards.

Handle123 · Feb 7, 2017

I would only trade the ones that have options and always hedge.

apo99 · Feb 7, 2017

Jones75 said:
If you want to buy, say 10,000 shares, leg in with tranches of maybe 2,000 each. Otherwise if you bought the whole amount at once, and the stock goes south , well you know the rest.

In fact, say you had done three leg ins, and things kept going south , but your research indicated this was an aberration, then long dated call options can come into play if the criteria meets your standards.

thats a great point, scaling in is an option but these small cap stocks have large intra day moves and wide spreads that make it slightly difficult. Sadly these stocks do not offer options.

Handle123 said:
I would only trade the ones that have options and always hedge.

sadly 99% of these dont offer options,

Handle123 · Feb 7, 2017

apo99 said:
...

sadly 99% of these dont offer options,

Then in my mind you taking small funds and risking too much of it in hopes it be profitable without any insurance. Every parachute? I use to when younger, one time I was very thankful for backup chute. I use to hate having that 2nd chute in front of me.

Have you tried charting off weekly charts?

eganon69 · Feb 7, 2017

apo99 said:
Momentum and Trend Trading entries

Hey Guys,

I have been looking to build a strategy for a while that targets small cap stocks mostly under $5. Everything I’m looking at is quite bullish; RSI between 60-100.

So it’s basically a cross between a momentum strategy and a trend trading system. My holding periods are quite short 2-8 days. Now I’m struggling with my entries, I don’t know if I should be entering on a small pullback or jump in like a momentum play, if anyone would have some insight it would be greatly appreciated.

Apo

Sorry to be so negative but I smell a HEAP of BullShit. This is the absolute greenest question (novice question) I have seen in a long time. Not the kind of question I would expect from someone with 60+ posts. So I decided to do a little digging. Turns out that your absolute 1st post here on ET was a thread where you were bragging about trading for 7-8 years with a yearly returns of 45% or more and growing your account to over $200k and pulling out $100k a year from this trading. And then you have a thread asking for an entry setup???? It's laughable. I don't know your objective or motivation but beyond this post I will not contribute to you and your bullshit thread. If you are going to act like something that you are not at least don't think that you are pulling the wool over our eyes. People like me and several others come on here sometimes to offer genuine advice and care for those just starting out. But I for one will not when someone is clearly fully shit. In fact when you were asked about putting up a chart to show what you were needing help with from another ET poster who was trying to help you you never even put up a chart. I suspect you have no clue about trading and want to be spoon fed all the nuances of trading. Probably a millennial too. Or maybe I am just a sour old man... like I said I don't know your motivations for being so disengenuous but you should move along....Happy Trading!

https://www.elitetrader.com/et/thre...-time-trader-quitting-school-and-work.304372/

https://www.elitetrader.com/et/threads/momentum-trading-entries.305354/

apo99 · Feb 8, 2017

Handle123 said:
Then in my mind you taking small funds and risking too much of it in hopes it be profitable without any insurance. Every parachute? I use to when younger, one time I was very thankful for backup chute. I use to hate having that 2nd chute in front of me

Have you tried charting off weekly charts?

That is the downside of these smaller companies, but i will buy options in oppositely correlated sectors to hedge against. I have tried using weeklies but i did not see a advantage to it.

apo99 · Feb 8, 2017

eganon69 said:
Sorry to be so negative but I smell a HEAP of BullShit. This is the absolute greenest question (novice question) I have seen in a long time. Not the kind of question I would expect from someone with 60+ posts. So I decided to do a little digging. Turns out that your absolute 1st post here on ET was a thread where you were bragging about trading for 7-8 years with a yearly returns of 45% or more and growing your account to over $200k and pulling out $100k a year from this trading. And then you have a thread asking for an entry setup???? It's laughable. I don't know your objective or motivation but beyond this post I will not contribute to you and your bullshit thread. If you are going to act like something that you are not at least don't think that you are pulling the wool over our eyes. People like me and several others come on here sometimes to offer genuine advice and care for those just starting out. But I for one will not when someone is clearly fully shit. In fact when you were asked about putting up a chart to show what you were needing help with from another ET poster who was trying to help you you never even put up a chart. I suspect you have no clue about trading and want to be spoon fed all the nuances of trading. Probably a millennial too. Or maybe I am just a sour old man... like I said I don't know your motivations for being so disengenuous but you should move along....Happy Trading!

https://www.elitetrader.com/et/thre...-time-trader-quitting-school-and-work.304372/

https://www.elitetrader.com/et/threads/momentum-trading-entries.305354/

I dont know why you think im being disingenuous, my only intentions were to ask a question. I asked this same question in another thread and mentioned it was for secondary system. I have only traded off the bid and ask and stated in my first thread that I never used T.A or any type of technical system (only tape reading) so i know almost nothing of conventional trading. I have traded this way since i started and have done good with it. I dont know why you are getting upset at me for asking a question and the opinion of a few other traders.

Chris Mac · Feb 8, 2017

apo99 said:
I dont know why you think im being disingenuous, my only intentions were to ask a question. I asked this same question in another thread and mentioned it was for secondary system. I have only traded off the bid and ask and stated in my first thread that I never used T.A or any type of technical system (only tape reading) so i know almost nothing of conventional trading. I have traded this way since i started and have done good with it. I dont know why you are getting upset at me for asking a question and the opinion of a few other traders.

You claim you made +45% on average during the last 7 years (or multiply by 12 :1.45^7) , which is better than 99.9% of traders, and at the same time, you don't know when to enter because "you never used T.A" ? Seriously?
Possibility 1 : you were lucky during the last 7 years (proba 0.1%)
Possibility 2 : you lie or magnify numbers (proba 99.9%)

CM

apo99 · Feb 8, 2017

Chris Mac said:
You claim you made +45% on average during the last 7 years (or multiply by 12 :1.45^7) , which is better than 99.9% of traders, and at the same time, you don't know when to enter because "you never used T.A" ? Seriously?
Possibility 1 : you were lucky during the last 7 years (proba 0.1%)
Possibility 2 : you lie or magnify numbers (proba 99.9%)

CM

I have never used T.A, and 40-50% return trading what are in essence penny stocks is not as impressive as you think, how can I prove this without posting personal info or tax returns. Anyways all i was doing was asking a opinion on entries i dont know why there is so much hate.

Take care