Using stops vs. limits for entry
- Thread starter NoDoji
- Start date
Watching ES action past week, I;ve found it to be a very different animal that I need a lot more time to get used to.
With stocks, you can get to know their "personality of the week" and after trading the same stock for a while the ability to pick price direction appears almost mystical. A while back I was trading SYNA frequently to the short side (it tended to fall far faster than it climbed and satisfied my ADD self). One morning I shorted it on the open and it tanked nicely. Someone asked me how I knew to short it at the open without any price action to set up the trade, and it came down to the fact that I'd been trading it so often I knew its S/R levels for almost any time frame, I knew what the bid/ask spread a minute before the open generally indicated, etc. etc., so it was a VERY educated guess.
I hope to get that kind of feel for ES soon as I would like to trade it live.
Ron that is very true. I think overall, since fear is stronger than greed, and since price tends to fall faster than it rises, using this strategy to the short side would produce less chop and fewer retracements.
The one situation where it would work well for the long side would be a buy stop placed very close to major support, because bounces off major support levels can be fantastic moves.
I trade STEC too. It's a fun one because it's pe is over 200 but has statements on it such as:
"In the last six weeks, STEC shares have twice surged about 30 percent in a single day after the company's torrid growth has proved even better than company officials and analysts expected.
The most recent occurrence was last week, when STEC shares jumped 27 percent in a single day after the company raised guidance a little more than five weeks after its last quarterly earnings report. Analysts expect the company to grow sales 41 percent this year, with just about all of that growth coming from its ZeusIOPS SSD line. "
AND
"Even if someone entered the market today, they would have to go through at least a full year of OEM qualification tests before they were in a position to wrench the business away from STEC," said Handy.
Avian Securities analyst Matthew Bryson wrote in a research note that "lead times for EMC SSDs remain lengthy, implying STEC has further room to grow before market demand is sated. We continue to believe that forward competition represents a significant threat to both STEC's revenue opportunity and margin structure, however, we do not see alternatives emerging before 2010."
So analysts may be raising their expectations for STEC for a while longer. "
HOWEVER
Coupled with the PE, annual revenue growth patterns are spotty.
My opinion is that the long side probabilities are dwindling but to date, it's uptrend is sticking tight.
My 7/6/09 humble opinion for someone who trades this day or short-term position, watch for a close less than 23.75 on a 60 minute chart (but include 1st half hour of trade as a 1/2 hr). If this happens, I believe the uptrend may break. A 'daily' close 7/6/09 below 23, I feel the probabilities of a change in trend are very high.
If you're looking for a high probability system to long it here and short it there intraday, I can show you, but it isn't something I want to post here.
In addition, STEC's movements to some extent follow the NASDAQ, so obviously, that's a variable I watch and pay close attention to.
"In the last six weeks, STEC shares have twice surged about 30 percent in a single day after the company's torrid growth has proved even better than company officials and analysts expected.
The most recent occurrence was last week, when STEC shares jumped 27 percent in a single day after the company raised guidance a little more than five weeks after its last quarterly earnings report. Analysts expect the company to grow sales 41 percent this year, with just about all of that growth coming from its ZeusIOPS SSD line. "
AND
"Even if someone entered the market today, they would have to go through at least a full year of OEM qualification tests before they were in a position to wrench the business away from STEC," said Handy.
Avian Securities analyst Matthew Bryson wrote in a research note that "lead times for EMC SSDs remain lengthy, implying STEC has further room to grow before market demand is sated. We continue to believe that forward competition represents a significant threat to both STEC's revenue opportunity and margin structure, however, we do not see alternatives emerging before 2010."
So analysts may be raising their expectations for STEC for a while longer. "
HOWEVER
Coupled with the PE, annual revenue growth patterns are spotty.
My opinion is that the long side probabilities are dwindling but to date, it's uptrend is sticking tight.
My 7/6/09 humble opinion for someone who trades this day or short-term position, watch for a close less than 23.75 on a 60 minute chart (but include 1st half hour of trade as a 1/2 hr). If this happens, I believe the uptrend may break. A 'daily' close 7/6/09 below 23, I feel the probabilities of a change in trend are very high.
If you're looking for a high probability system to long it here and short it there intraday, I can show you, but it isn't something I want to post here.
In addition, STEC's movements to some extent follow the NASDAQ, so obviously, that's a variable I watch and pay close attention to.