ASK ME ANYTHING: Hoping to Help!

This is a discussion on ASK ME ANYTHING: Hoping to Help! within the First Steps forums, part of the Reception category; now that joker has left let's talk orders: There's a reason that global exchanges have converged on a relatively small ...

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Old Oct 13, 2016, 11:02am   #9
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tobecont started this thread now that joker has left let's talk orders:

There's a reason that global exchanges have converged on a relatively small number of order types. They all have their uses.

Perhaps a better way for me to explain why I initially suggested stop and limit orders is to think about the thought process ahead of trade entry right up until the trade is live. For traders that have a target price in mind at which they believe there is likely to be a reversal, it's clear that a limit order is appropriate. For traders that believe once a certain price level is reached, price is likely to extend in that direction, a stop order is appropriate. Having these defined entry levels allows you to specify your risk ahead of the trade and size the trade accordingly. There is of course the risk that the price never reaches your target level and as Tim said, that failure to retrace to your level often precedes an extended move in the direction you were looking to trade. That is always going to be the case with any type of trading. You will miss trades. That is fine.

What one can do to help reduce the number of good trades missed is apply another set of rules that state if a given set of criteria is met, regardless of absolute price levels (i.e. bearish engulfing candle on x tf) then execute a market order. So an example of the logic written in to the trading plan or considered before each trading session:

a) Am I bullish this instrument? yes
b) What level do I target for purchases? 100
c) What else would convince me to buy? Break above 105 or 25sma>50sma.

So in the above example, I can use a limit order at 100, a stop order at 105 (Mr Chart, you mention momentum issues: The limit order will see positive slippage if anything and a stop order essentially becomes a market order at execution (depending on the trading venue) so will be no more punitive than market order in that sense) or I can monitor live/algorithmically the moving averages and enter a market order when 25>50.

The key to all of the scenarios here is that they are clearly defined AHEAD of trading. For novice traders in particular I believe it is critical to take the analysis out in front of the trade and have a very specific framework in place for trade entry. The risk when using market orders is that one reacts to market noise and makes decisions on the fly that are not defined within our trading plan.

Does that resonate with you guys? I hope I am being clear.
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Thanks! The following members like this post: darktone , Oscar Reed , swissy , djrikstar
Old Oct 13, 2016, 11:02am   #10
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Originally Posted by Mr. Charts View Post
Even having lived in Newcastle for nine years I find Return from the Pond's posts unintelligible and certainly don't have the time to try to understand anyway.

I tried google translate but that failed too

Well that game didn't last long did it?
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Old Oct 13, 2016, 12:51pm   #11
 
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Old Oct 13, 2016, 3:14pm   #12
 
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Originally Posted by tobecont View Post
Hi All,

Forgive my self indulgence...

I have recently decided I would like to spend more time writing. Having committed my life to trading markets, there's little else that I can write about that will be of any use to anyone.

If there's one thing I hope I can offer interesting and perhaps even helpful insight in to then it is the world of trading. I am listed as a money manager (trader) on several of the world's financial regulators' registrars. I have worked as both a market maker and a proprietary trader in some of the world's biggest banks and money managers as well as having traded my own capital. I don't mention this to boast, just to differentiate myself from 99% of the spivs offering trading advice online these days.

After being in something for so long it's sometimes difficult to see it through the eyes of someone at the beginning of their journey and so rather than arrogantly write about what I think is important, I'd appreciate some questions from the forum for which I hope my answers can provide some help along your way.

I won't be charging anyone for anything. As above, this is purely an indulgence for me.

Please tell me, how can I help?
Hello, thanks for passing by and starting this thread.

Is appropriately sized scaling in / out a viable strategy for the retail account?
From the areas of experience youve listed above id like to hear your professional view on the subject. Here in the retail environment it gets lumped into the 'averaging in / adding to losers' box and for the most part gets cast aside as an option.

Most discussion on this forum concerns the 'confirmed' rather than the 'discovery' side of price action. Be nice to hear your views on the various approaches.

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Old Oct 13, 2016, 3:27pm   #13
 
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great idea for a thread tobecont.

my Q: under what conditions would you double down on a trade?
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Old Oct 13, 2016, 3:39pm   #14
 
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great idea for a thread tobecont.

my Q: under what conditions would you double down on a trade?
never-your entry is wrong to start with
im always careful on the old pork belly entry-i once doubled down and 2 hogs were delivered to my door.
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Old Oct 13, 2016, 3:51pm   #15
 
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never-your entry is wrong to start with
im always careful on the old pork belly entry-i once doubled down and 2 hogs were delivered to my door.
you are saying take the stop and buy again lower (assuming the bullish position)?

entry's are always wrong, who can precision-laser buying to the tick?? if anyone could they wouln't need a stop which means i will be wrong this amount.
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Old Oct 13, 2016, 3:59pm   #16
 
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Your views on stop losses, hard exit and take it on the chin (V) no stop loss in the belief you are correct in your analysis and average up or down depending on your position.
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