No, they cannot find retracement points, they just pick another stock.
For the stocks you mentioned I see retracement points for all of them.
Should you or should you not chase?
- Thread starter schizo
- Start date
No, they cannot find retracement points, they just pick another stock.
For the stocks you mentioned I see retracement points for all of them.
Actually, not all daytraders are created equal. If you're a scalper (trading ES futures) going for, say, only 4 ticks, you might just pass and wait for another opportunity. But if you are more of a momentum trader going for several points, it might be worth it to chase the price, depending on the strength of the momentum.
- Low momentum = high chance of pullback
- High momentum = low chance of pullback
Sekiyo provided a solid answer in his first post in this thread.
Other inputs to consider are relative volume/volatility on pullback and duration of correction. For example, a pullback has occurred and the last two minutes have been relatively quiet, but price has not yet touched a comfortable entry area, like seen in today's early morning trading in ES. An idea would be to go long now, perhaps with a partial position.
The above can be partially illustrated how I traded or attempted to trade this Monday. In the early morning I was closing out long swing trade positions because prices were in reversion to mean territory on the swing time frame and ES volatility term structure showed a IV spite on Thursday, presumably due to the scheduled release of inflation data. I felt it would be difficult for the market to sustain risk seeking ahead of this report, in spite of a seemingly more favorable macro environment for lreduced inflationary pressure. I was willing to go long in the morning for a quick scalp on a pullback to either VWAP or the mean. I did not enter a long during a lull in activity because of a less than favorable R/R. After flatting my swing positions, I started looking to fade new highs for scalp trades that tend to last about 2 minutes, but no signals of that type were generated. Instead, I opted for a bearish option position on the swing position time frame.
My flexibility in entry criteria and size of initial scalp positions are influenced by longer times frames, my assessment for market's appetite for risk, and time of day.
In conclusion, if you are finding you are second guessing your entries and exits, you may need to incorporate and additional input or two in your decision making and or to employ a scaling strategy in certain situations.
I don't agree.
When I get a signal I get in at MKT. Because extensive testing showed that my signals can almost never get a better price. I don't chase. MKT orders are part of my strategy. If I try to get in AFTER the generated signal, I would be chasing.
To me the definition of chasing is acting after the signal that you should have taken.
But if there is major slippages, that's kinda chasing even though you were just trying to get in a position with a market order. To me, not chasing is putting in a limit order and waiting until the price comes to you and if the price never comes to you and you are not able to get into a position then so be it.
I have no time to put a price in the market as I don't know the price till the moment that I get a signal. As I always get in when the market moves in the right direction, putting in a price will or result in missing the trade, or getting a horrible quote. I even have no clue what price I should put in. Theoretically it should be the price when the signal was generated. Which is the market order price...
The cheapest solution, at least for me, is that I just go all in when the signal is there. I don't even watch the price, I watch the signal.
The majority of my entries are, and stay, in profit within 1 minute after entering, which means that my market order will almost always be better than anything else. And at least I am sure not to miss the trade. If I miss one trade, I lose on average 10 or more times the theoretical profit that I can make by putting a limit price. That can never be compensated by a limit order that even will notr be touched many times.
If you put a price, it means that you are chasing after that price, you want that price, that's chasing.
If you place a marketorder you chase nothing, you just take what you get.
Not if the price for the limit order is worse than the current market price for the direction of the trade that you want to be in.
I agree. If you want a worse price. I never thought about a worse price.
But at the same time my market order is also not chasing.
I agree. If you want a worse price. I never thought about a worse price.
But at the same time my market order is also not chasing.
Ok
Good thread. Some interesting exchanges.