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Nikkei
- Thread starter Cutten
- Start date
Quote from grimer11:
sometimes the bands are slaves to the prices.
grimer11
Very true. Trading bollinger bands gives you lots of sweet trades, but in return you have to take the occasional ass-reaming. The trick is in knowing when to step aside if the market is on a major one-way trend, but inevitably sometimes you get run over and have to puke out at a big loss.
Market is now just above previous resistance, trading 10940-50. I'm raising my stop on the SIMEX contracts to 10865, just below the recent intraday swing low @ 10880.
Brian - agree about the US. A big US tank was my main fear, and it didn't happen. Coincidentally I was reading "Pit Bull" today, and the following advice applies quite well here IMO:
"Worst Fears not Realized
I have stated before that whenever your worst fears are not realized about a trade and the market is letting you out better than you expected, it is not just good luck. Rather, your position is most likely correct and should not only be held but perhaps added to." (P. 287, "Pit Bull")
Reading that gave me the idea to add to my position, because I was sure as hell nervous about the trade before the US open today!
P.S. just bought a bit more 10960. Close stop @ 10910 for this one.
P.P.S. just got stopped out on this one @910, nevermind.
I really hope it works out for you......I love bollis in concert with slow stochs and macd.....they pull back inside that lower band and youre in the catbird seat.......I usually add 1/2 to the position in a stop entry once the position re enters from the extreme for what its worth.....best of luck.
grimer11
grimer11
Cutten - great quote. Thanks for reminding us of that gem....
"I have stated before that whenever your worst fears are not realized about a trade and the market is letting you out better than you expected, it is not just good luck. Rather, your position is most likely correct and should not only be held but perhaps added to." (P. 287, "Pit Bull")
"I have stated before that whenever your worst fears are not realized about a trade and the market is letting you out better than you expected, it is not just good luck. Rather, your position is most likely correct and should not only be held but perhaps added to." (P. 287, "Pit Bull")
Quote from grimer11:
I really hope it works out for you......I love bollis in concert with slow stochs and macd.....they pull back inside that lower band and youre in the catbird seat.......I usually add 1/2 to the position in a stop entry once the position re enters from the extreme for what its worth.....best of luck.
grimer11
Yeah, that's a good way to play it. The great thing is that it uses the oversold condition to enter partially, but then waits for a momentum change in its favour before increasing the size, thus improving your odds. The danger with B-bands is trying to catch a falling knife, so a method which keeps you out of the way during the plummet, whilst getting you in once the market bounce starts in earnest, would be a great tool.
A better approach rather than buying into a freefall due to an oversold condition on the daily chart may be to zoom in shorter-term, looking for a reversal in momentum on say 30 or 60 min charts. The daily B-bands flag up an opportunity, then the intraday charts are used to wait for favourable momentum, reducing the risk and increasing the chances of a successful trade.
Looking at yesterday, intraday there was never a 30 or 60 min bar which closed above the high of the previous bar. The trend was solidly down all the way.
Using the hybrid timescale approach, you could see the oversold condition on the daily, then zoom in to the intraday 30/60 min and see the momentum was still unfavourable. Waiting for the first intraday break higher, making higher highs on 30/60 mins, would have let me get in at 10850-10890 today, with max 100-140 downside risk, instead of bottom-fishing yesterday starting at 11030, suffering a 260 point drawdown from my first buy point.
This looks like it could be a great strategy. If so, it'll be worth the initial losses and stomach-churning from yesterday!
Ok, there's potentially a lower high at 10950 now. I'm bailing on the 5 Osaka contracts @10920 for a 40 point loser per contract. Keeping the SIMEX contracts with a stop at 10860. So worst case I'll be about breakeven on the total trade, and I still have upside on the 12 remaining contracts.
Basically I had on a bit too big a position to feel comfortable. That's ok when the momentum was strongly up, but now it is pausing I want to reduce the risk to more acceptable levels.
Basically I had on a bit too big a position to feel comfortable. That's ok when the momentum was strongly up, but now it is pausing I want to reduce the risk to more acceptable levels.