Should you or should you not chase?

schizo

schizo

You must believe that you are invariably the last one in line to get filled. What's worse, since you're the last one in line, once your order does get filled, the price will almost always get lifted and immediately move against you.

But what should you do if it comes up and tags your price but doesn't necessarily pick you up? Should you chase it or patiently wait? When should you chase it and when should you not? I think this may be the biggest conundrum for seasoned traders and noobs alike.

BTW you don't need to reply with some irrelevant answers if you don't know. There's no embarrassment or shame in that. :)
 
The best way not to chase is to use either stop or limit orders at predefined levels.

If the limit doesn’t get filled …

Don’t chase.

Maybe elaborate a B plan :
“If limit not filled then … “

Simple thing …
Let say you want to buy support.
Support area is defined as 100 to 103

Price enters the zone, hits 100 but you’re not filled.

Ideally plan B would be a buy stop @ 103

Price move up,
Triggers your buy stop.

That’s it …

Cancel your limit.

Done.

If it doesn’t even enter the zone …
Simply buy the breakout.

Not worth chasing inside the no man’s land.
 
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Sekiyo said:
The best way not to chase is to use either stop or limit orders at predefined levels.

If the limit doesn’t get filled …

Don’t chase.

Maybe elaborate a B plan :
“If limit not filled then … “

Simple thing …
Let say you want to buy support.
Support area is defined as 100 to 103

Price enters the zone, hits 100 but you’re not filled.

Ideally plan B would be a buy stop @ 103

Price move up,
Triggers your buy stop.

That’s it …

Cancel your limit.

Done.

If it doesn’t even enter the zone …
Simply buy the breakout.

Not worth chasing inside the no man’s land.
More...
I think you brought up a good point differentiating between a 'buy point" vs "buy zone" (for the lack of better terms). In certain cases, you will want to get in at a certain price. For example, this would pertain to a PULLBACK in an already established trend. But if you were getting in at the bottom trying to catch a falling knife, well, buying a breakout from a certain price zone would work out better.
 
If I may share my opinion and what I did:

If you are a momentum or trend trader with a holding period of several weeks to months, what your buying price is is not that important. I mean, yes, price matters, but it's less relevant.

I personally buy at any price offered at that time. Why?

Because as a momentum trader, when I'm about to buy, I've basically somehow made a "prediction" that the price is going to go up. If I missed the quoted price at the time, I would lose momentum and end up badly by either missing the train or getting a much higher price.

What if the price drops?

That is the risk of momentum or trend traders. Not all trades will end up as winners. Therefore, I place positions based on volatility.
 
smallAxe said:
If I may share my opinion and what I did:

If you are a momentum or trend trader with a holding period of several weeks to months, what your buying price is is not that important. I mean, yes, price matters, but it's less relevant.

I personally buy at any price offered at that time. Why?

Because as a momentum trader, when I'm about to buy, I've basically somehow made a "prediction" that the price is going to go up. If I missed the quoted price at the time, I would lose momentum and end up badly by either missing the train or getting a much higher price.

What if the price drops?

That is the risk of momentum or trend traders. Not all trades will end up as winners. Therefore, I place positions based on volatility.
More...

If I am bullish, I neither buy on a reaction, nor wait for strength; I am already in.
Being bullish and not being long is illogical.

-Ed Seykota :p
 
smallAxe said:
Because as a momentum trader, when I'm about to buy, I've basically somehow made a "prediction" that the price is going to go up. If I missed the quoted price at the time, I would lose momentum and end up badly by either missing the train or getting a much higher price.
More...
That's my thinking as well. If you have confidence in your "prediction" and there's momentum to back you up, then better you get in now than later. But the perennial keywords are TRAP and FLEXIBILITY. Always watch out for traps and be flexible enough to bail out at moment's notice when the trade doesn't pan out as expected.
 
LOL, in my "learning" years I sold T-bonds at the market cause price was falling hard, I got a price outside of daily range, exchange changed the low hour after market closed to show my horrible fill. I never chased after that. You do so many trades in a lifetime, best to do limit orders, if I don't get filled, no big deal.
 
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