15 replies to this topic

[Rogerdodger]

Here's a chart with that "30 minute high" following a gap shown.
If bought, I don't know where Pristine recommends placing a stop.
But you could have picked up 2 points.
That dip I circled in Blue was the dip I was watching but passed up.

Shorts could have reversed when the 30 minute high was taken out and made money!

http://stockcharts.c...3534&r=4092.png

Edited by Rogerdodger, 14 July 2007 - 10:26 PM.

[Rogerdodger]

Oh. Yeah, Here's why I bought Wednesday. A PERFECT GAP FILL!
(In addition to the bearish sentiment shift Tuesday night.)

http://stockcharts.c...1459&r=3357.png

[arbman]

I was hoping the same thing on NDX, never happened...

[Sentient Being]

I have a stop loss tool that tracks the market up. If it sees an increase in volatility it hangs back a bit and gives it more room to run. I'm not sure that the gaps have much meaning to it at all, it's just a price move. If it's a big gap than volatility has increased and it will trail further behind. If its a small gap, the gap may have no effect at all on the tool. One thing I've noticed from doing a lot of optimization work in the last few weeks. It seems as if the wider setting is often the most profitable. But you have to also stick to it, don't bail out because you "think" the market is going down and you can save yourself by abandoning the stop tool and exiting "early". My trading is better when I use mechanical systems which is why I've returned to system building / Optimization and my stop loss tool.

[Rogerdodger]

It seems as if the wider setting is often the most profitable. But you have to also stick to it, don't bail out because you "think" the market is going down and you can save yourself by abandoning the stop tool and exiting "early".

I agree on the wider stop. One stop I often use is the previous days low.
But you know how it is, you see all that profit, you don't want to give it back in an early gap fill reversal.
Thankfully I did only do a partial sale with a break-even stop on the rest.

I use that money management strategy in Vegas playing craps.
I'll place $24 on 6 and 8.
When either hits I get paid $28.
Then I reduce my original bet to $12 on the 6 and 8.
Now I'm up $4 and still in the game playing with the "house's money" as they say.

[Sentient Being]

I think it depends on how you trade. If your system does or does not give you a probability advantage and if you do or do not follow your system. When I'm following a mechanical system it's easy, just follow the rules. I think in a sense, everyone follows a mechnical system. For some that system is just the rules in their head. Others simply take the time to write the rules down. And some might go as far as backtesting them to see if they appear to work or under what conditions they work. I know a guy that has great trading "instincts" (he works in multiple time frames, uses a few basic TA tools) but who always pulls the trigger too early and misses the great runs. He knows he does that but hasn't been able to resolve it. One day he's faithful to his set stop and the next day he just has to pull the trigger because he doesn't want to take the loss if it the stock keeps moving against him. He just did it with gold, now he's looking at gold going: "why oh why did I bail out on this run". I know from the system testing that I do that if one has an appropriate stop loss for the issue traded....one has to stick to it because intervention can be the difference between hanging on to a great run and bailing out too early. Some get around that I suppose by taking long and short term postions. Trading around a position. But again, that's their system and if it DOES give them a statistical advantage then they need to stick with that system of long term positons while the trend is in and short term scalps along the way.

Edited by Sentient Being, 15 July 2007 - 12:44 PM.