What does it mean to enter on X% Limit?

F

Fooze666

This is my first post here and it's probably a dumb question to most of you, but I need to make sure I'm understanding this term correctly. I've been doing a lot of reading lately and keep seeing this similar terminology but no clear explanation of it.

What does it mean if someone is talking about a strategy and they say something like "If this condition exists, we enter the next day on a 5% limit"?

I assume limit means limit order, but what is meant by the 5%? Does this mean to set a limit order at up to +5% of the closing price?

Thanks!
 
It means nothing and there is no such term, unless it’s in a context explained by the person using that term.
 
Hmm...I'll have to backtrack a little and see if I missed something in what I've been reading then. The way it's written in the book I'm reading, the author just seems to throw it out there like it's a phrase that's regularly used and everyone should understand.

Thanks for the answer though, I appreciate it.
 
Fooze666 said:
This is my first post here and it's probably a dumb question to most of you, but I need to make sure I'm understanding this term correctly. I've been doing a lot of reading lately and keep seeing this similar terminology but no clear explanation of it.

What does it mean if someone is talking about a strategy and they say something like "If this condition exists, we enter the next day on a 5% limit"?

I assume limit means limit order, but what is meant by the 5%? Does this mean to set a limit order at up to +5% of the closing price?

Thanks!
More...
I've never heard that terminology used in stock trading.
However it could mean a 5% trailing on current price.
 
Last edited:
Fooze666 said:
This is my first post here and it's probably a dumb question to most of you, but I need to make sure I'm understanding this term correctly. I've been doing a lot of reading lately and keep seeing this similar terminology but no clear explanation of it.

What does it mean if someone is talking about a strategy and they say something like "If this condition exists, we enter the next day on a 5% limit"?

I assume limit means limit order, but what is meant by the 5%? Does this mean to set a limit order at up to +5% of the closing price?

Thanks!
More...


It would help if you typed out the paragraph that sentence is in, so we can get some context.
 
The overall context is talking about the testing of a strategy using RSI signals for entries and various exit methods. The basics are that if the RSI is at whatever number, enter a trade on the next day.

The exact text:

We looked at all stocks above the 200-day MA from 1995-2007 which had
closed at a 10-day low, and entered the next day on a 5% limit. We then
tested various exits. Here are the results.
 
Given above, I agree with your interpretation. Basically they are willing to buy/sell within 5% of the previous close (in case of a gap)
 
That's what I was thinking. It was a little bit of insurance to try to get in on the trade if there was a small gap but not go too far.
 
Fooze666 said:
The overall context is talking about the testing of a strategy using RSI signals for entries and various exit methods. The basics are that if the RSI is at whatever number, enter a trade on the next day.

The exact text:

We looked at all stocks above the 200-day MA from 1995-2007 which had
closed at a 10-day low, and entered the next day on a 5% limit. We then
tested various exits. Here are the results.
More...

That sounds very much like a Larry Conners quote.

He is saying "today made a 10-day low, enter tomorrow on a limit order 5% below today's close." (.95 X today's close)

I've thoroughly backtested his methods myself, and yes they work.
 
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