I've been trading for about three years, and have a problem that has become, over time, quite maddening to me. Whenever I execute a trade, one of two things happens: 1. if filled, it immediately reverses, or 2. the trade isn't filled. After the reversal, sometimes it changes direction again for a profit, other times I'm out for a small loss. I've tried hundreds of different strategies to execute just prior to or into the directional flow, but always either it reverses at entry or is not filled. I use IB, esignal and autotrader. I watch tick charts, various time charts, L2, time and sales. I buy at ask, buy at bid, sell at bid, sell at ask. I trade small and larger size. I've read books, taken courses, seminars and chatrooms. I'm not looking for the 'secret formula', but feel that a simple piece of hardware, software or mentalware is missing, that I am clueless to. Any suggestions will be greatly appreciated.
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Trading Clueless
- Thread starter miskie
- Start date
fade yourself.just kidding.lol
miskie,
That sounds like what i went through for a long time. It's hard to make suggestions without more specific info. What market(s) are you trading, what is your trading strategy (in general), etc.?
One thing that might help is to enter your trades with market orders, since you said that you tend not to get filled on the trades that would have worked.
It also sounds like you have a timing problem - if what you said is occurring, then you are buying at short term highs and selling at short term lows. You need to get in a little earlier or a little later (prior to, or on the pullback from the extremes).
How much room are you giving your stops? I hate wide stops and tend to use fairly tight ones myself, but your particular style of trading may require wider stops if the trade reverses on you so often after entry (a better solution would be to try to fix the entry, though). Still, you may have your stops unrealistically close. If you're trading off of a 5 minute chart and placing your stops 2 ticks away, then obviously the price is going to "reverse" and take out your stop almost all of the time.
Finally (and I believe most important), what kind of trade management are you using? How far do your trades go in your favor on average before they "always" reverse on you. Do you often get a couple of points in your direction, but are hoping for much more? Maybe your expectations are too high, and you need to grab a point or two on part or all of your position. This was a big problem for me for a long time. I had to learn to be content with what the market was willing to give me, and it's usually a lot less than what I would like, but lots of little winners can add up.
What helped me a lot in this area was to use whatever entry technique I happened to be using at the time and just do scalp trades. For example, trading the e-mini s&p, I would enter with one contract and just go for 1 point profit by placing a limit order after entry (in fact, I still go for 'just' 1 point on the initial part of my position, then move my stop up on the rest). This gives you an opportunity to score some wins, and get a realistic view of how many trades will go in your favor. You can then begin to adjust your technique with minimal risk.
Hope this helps.
That sounds like what i went through for a long time. It's hard to make suggestions without more specific info. What market(s) are you trading, what is your trading strategy (in general), etc.?
One thing that might help is to enter your trades with market orders, since you said that you tend not to get filled on the trades that would have worked.
It also sounds like you have a timing problem - if what you said is occurring, then you are buying at short term highs and selling at short term lows. You need to get in a little earlier or a little later (prior to, or on the pullback from the extremes).
How much room are you giving your stops? I hate wide stops and tend to use fairly tight ones myself, but your particular style of trading may require wider stops if the trade reverses on you so often after entry (a better solution would be to try to fix the entry, though). Still, you may have your stops unrealistically close. If you're trading off of a 5 minute chart and placing your stops 2 ticks away, then obviously the price is going to "reverse" and take out your stop almost all of the time.
Finally (and I believe most important), what kind of trade management are you using? How far do your trades go in your favor on average before they "always" reverse on you. Do you often get a couple of points in your direction, but are hoping for much more? Maybe your expectations are too high, and you need to grab a point or two on part or all of your position. This was a big problem for me for a long time. I had to learn to be content with what the market was willing to give me, and it's usually a lot less than what I would like, but lots of little winners can add up.
What helped me a lot in this area was to use whatever entry technique I happened to be using at the time and just do scalp trades. For example, trading the e-mini s&p, I would enter with one contract and just go for 1 point profit by placing a limit order after entry (in fact, I still go for 'just' 1 point on the initial part of my position, then move my stop up on the rest). This gives you an opportunity to score some wins, and get a realistic view of how many trades will go in your favor. You can then begin to adjust your technique with minimal risk.
Hope this helps.
You are obviously buying strength to get into the market. Enter a limit order two points back from the last trade with your stop a bit back from that. Often the market will pullback get you in, then take off in the primary direction.
You will get into a lot less trades, but that may not be a bad thing if your win loss ratio is looking a bit sick.
Have a look at a five minute bar. Even when it makes a new high, it usually pulls back to at least a third of the distance of the previous bar. You don't want to buy the new high as you'll get whipped out to much.
Runningbear
You will get into a lot less trades, but that may not be a bad thing if your win loss ratio is looking a bit sick.
Have a look at a five minute bar. Even when it makes a new high, it usually pulls back to at least a third of the distance of the previous bar. You don't want to buy the new high as you'll get whipped out to much.
Runningbear
Originally posted by miskie
I've been trading for about three years, and have a problem that has become, over time, quite maddening to me. Whenever I execute a trade, one of two things happens: 1. if filled, it immediately reverses, or 2. the trade isn't filled. After the reversal, sometimes it changes direction again for a profit, other times I'm out for a small loss. I've tried hundreds of different strategies to execute just prior to or into the directional flow, but always either it reverses at entry or is not filled. I use IB, esignal and autotrader. I watch tick charts, various time charts, L2, time and sales. I buy at ask, buy at bid, sell at bid, sell at ask. I trade small and larger size. I've read books, taken courses, seminars and chatrooms. I'm not looking for the 'secret formula', but feel that a simple piece of hardware, software or mentalware is missing, that I am clueless to. Any suggestions will be greatly appreciated.
You sound like someone who needs tweeking. I would advise you to find a mentor who will help you find better entry points, teach you to lock in your profits, and to control your losses.
If I understand Miskie's original question correctly, apparently the stock reverses direction immediately when the order is filled, or the order is never filled. I have been experiencing this alot on NYSE trades. I enter a limit order to short/buy, typically 0.10 below the current bid/ask. My order may sit there for a while without executing, then magically it executes and the bid/ask immediately moves in the opposite direction, sometimes more than 0.50 against me (someone trying to stop me out?). Many times the order is ignored and the market moves away from my entry price leaving me with no fill (even though many times I am the best bid/offer). Specialists play a nasty game.
Yeah, yeah, yeah. I've heard it all before about how the specialist does not care about my little 1000 share order, but this happens too frequently for it to be simply coincidence. Maybe I'm just paranoid. Case in point today was IBM. Order to short at 0.15 below the current bid. Order sits there without executing, then all of a sudden the stock start dropping, more than 0.70, I am never filled, although several other orders went off at worse prices than mine.
Yeah, yeah, yeah. I've heard it all before about how the specialist does not care about my little 1000 share order, but this happens too frequently for it to be simply coincidence. Maybe I'm just paranoid. Case in point today was IBM. Order to short at 0.15 below the current bid. Order sits there without executing, then all of a sudden the stock start dropping, more than 0.70, I am never filled, although several other orders went off at worse prices than mine.
Originally posted by echo33029
If I understand Miskie's original question correctly, apparently the stock reverses direction immediately when the order is filled, or the order is never filled. I have been experiencing this alot on NYSE trades. I enter a limit order to short/buy, typically 0.10 below the current bid/ask. My order may sit there for a while without executing, then magically it executes and the bid/ask immediately moves in the opposite direction, sometimes more than 0.50 against me (someone trying to stop me out?). Many times the order is ignored and the market moves away from my entry price leaving me with no fill (even though many times I am the best bid/offer). Specialists play a nasty game.
Yeah, yeah, yeah. I've heard it all before about how the specialist does not care about my little 1000 share order, but this happens too frequently for it to be simply coincidence. Maybe I'm just paranoid. Case in point today was IBM. Order to short at 0.15 below the current bid. Order sits there without executing, then all of a sudden the stock start dropping, more than 0.70, I am never filled, although several other orders went off at worse prices than mine.
you ever hear of the uptick rule?