Trading Dummies
- Thread starter Babak
- Start date
I tried my first dummy trade today after spending time following this thread. I'm a futures scalper, so I don't trade swings or hold anything for more than a few minutes. I'm trying to dabble in stocks on a shorter time frame now to apply this method to longer term charts once I get comfortable.
Can someone have a look at this play with JCOM and let me know what I might have overlooked? I'm curious if this trade didn't statistically work out or if I've overlooked something.
My trigger bar was the 2nd 5-min at 44.50 with a stop at 43.88. Trade went well for a while, but headed south very quickly and stayed that way.
Any comments appreciated.
Can someone have a look at this play with JCOM and let me know what I might have overlooked? I'm curious if this trade didn't statistically work out or if I've overlooked something.
My trigger bar was the 2nd 5-min at 44.50 with a stop at 43.88. Trade went well for a while, but headed south very quickly and stayed that way.
Any comments appreciated.
That looks like a valid Dummy play to me if you're going to use 5 minute bars. There was an impulsive move to the upside so you found a low risk spot to get long. It didn't work out but hopefully you kept your loss small. I have averaged around a 40% win rate on my dummy trades (using 15 min. bars) so you have to accept the losses. Good trade.
That's cool - if you are talking in the context of a specific methodology, I understand.
I was just looking at the broader picture - in this case 6 months, and CD has been in a downtrend. So, if the setup is there, it made sense to fade a gap up.
But I digress - back to the methodology in the thread...
FuturesTrader71
I too follow Dummy Trade principles using 5-minute charts.
I have found that promising trades often come to a halt at round numbers, particularly 5's and 10's. I now try to exit a trade like JCOM today BEFORE it hits my initial R1 stop, accepting the cost of entering again if the move resumes. (Less costly than taking the full cost of -R1)
If JCOM had been my trade today, I reckon I would have been seriously looking at getting out once candle 6 had finally printed. I tend to ignore the first candle of the session when looking at patterns, and if you do this, candles 5 & 6 stand out as clear rejection of $45.00.
Just my view of course, but we all have to find our way. Hope the comments help, and good luck!
nimrodeo
I too follow Dummy Trade principles using 5-minute charts.
I have found that promising trades often come to a halt at round numbers, particularly 5's and 10's. I now try to exit a trade like JCOM today BEFORE it hits my initial R1 stop, accepting the cost of entering again if the move resumes. (Less costly than taking the full cost of -R1)
If JCOM had been my trade today, I reckon I would have been seriously looking at getting out once candle 6 had finally printed. I tend to ignore the first candle of the session when looking at patterns, and if you do this, candles 5 & 6 stand out as clear rejection of $45.00.
Just my view of course, but we all have to find our way. Hope the comments help, and good luck!
nimrodeo
Thanks to you and newtoet for your replies.
You are right about the 6th candle. It was obviously a dark cloud and I might have done better to exit. At the same time, trading these swings is a great departure from what I do normally while trading. I have a lot to learn. I ultimately held on to my stop because that was the plan and I didn't want to mess with it. It seemed like many people had their stop in the same spot, so it ran for almost 10 cents when my stop was hit. I need to reconsider how I place my stops. Overall, I feel good about how I executed and stuck the trade out.
I will consider 15 min bars (by the time the first 3 bars have closed, I should have a better idea of what to expect for the day). Thanks for the input.
Is anyone trading these on daily's?
kgharris, thanks for the link to the blog - very interesting.
nimrodeo, good insight re round numbers. Its not a secret that good exits are vital for maximizing the 'dummy' trade.
re trend/gap ups, if you notice my first example in the thread (ATYT) was a gap down which then shot up. Its not always as clear cut as gap down=short. I've already explained the way I tend to play them...but everyone can have their own take on it. btw chud, 40% win rate is quite respectable!
Attached is 15 min. Refco (RFXCQ). In bankruptcy and loving it!
btw BOT continued to rock.
nimrodeo, good insight re round numbers. Its not a secret that good exits are vital for maximizing the 'dummy' trade.
re trend/gap ups, if you notice my first example in the thread (ATYT) was a gap down which then shot up. Its not always as clear cut as gap down=short. I've already explained the way I tend to play them...but everyone can have their own take on it. btw chud, 40% win rate is quite respectable!
Attached is 15 min. Refco (RFXCQ). In bankruptcy and loving it!
btw BOT continued to rock.