Using stops to get into the market from being out of the market

aphexcoil

aphexcoil

We all know that limit orders are used to grab a price that comes to our level -- but this means that the market has to move in a direction away from where we want it to go once our limit gets accepted.

Well, how about trailing open orders that follow the market and then get automatically triggered, where another stop is place on the reverse side to follow it back up?

Any ideas or comments?

aphie
 
I used to use these all the time.

I traded a system that established a breakout from initial range. I'd place a contingent buy order and a contingent sell order either side of the range, and just wait for one to get hit. I'd then cancel the other one and simply manage a trailing stop until it was hit or the day ended.

If the market ever reversed the initial trend, I'd reverse my position in the direction of the trend at the new day low or high of the session, with a trailing stop.

That was my entire system. Maximum of two trades per day.

Runningbear
 
Originally posted by aphexcoil
We all know that limit orders are used to grab a price that comes to our level -- but this means that the market has to move in a direction away from where we want it to go once our limit gets accepted.

Well, how about trailing open orders that follow the market and then get automatically triggered, where another stop is place on the reverse side to follow it back up?

Any ideas or comments?

aphie
More...

I'm confused

Can you explain what you mean by a trailing open order?

You lost me on that.

Robert
 
rtharp,

Well, with a stop loss, you are out of the market until you are hit, so why not trail the prices like you would if you were in the market and then wait till you get "stopped in"?

aphie
 
Originally posted by aphexcoil
rtharp,

Well, with a stop loss, you are out of the market until you are hit, so why not trail the prices like you would if you were in the market and then wait till you get "stopped in"?

aphie
More...


I am also a little confused here....."with a stop loss you are out of the market until you are hit,"......
 
This does not work! Believe me I have tried it.

You will get continually spanked around. You may win a small amount a few times in a row but then will lose more than that the next. Try putting this strategy into TS or Wealth Lab or anything else and you will easily see the horrid results.

The problem with this is that you will often get in at the extremes of moves that have already happened.
 
Originally posted by aphexcoil
We all know that limit orders are used to grab a price that comes to our level -- but this means that the market has to move in a direction away from where we want it to go once our limit gets accepted.

Well, how about trailing open orders that follow the market and then get automatically triggered, where another stop is place on the reverse side to follow it back up?

Any ideas or comments?

aphie
More...

I do this all the time - when I get a signal, I have a specific price I want in at - period. If I'm going long, and we are below that price, then I enter a BUY STOP at my entry price.

It all depends on your system and how you trade.
 
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