isa's short term trading journal

Splitlink · Jan 16, 2011, 8:46am

The first company I used for trading was IG. This was in the 80s and I lost 60 points and was stopped overnight. I rang them and they told me that it was legitimate and were sorry and that was that. I did not argue about it but switched to CI and, then, to Fins where I have been since before they went online, which is a long time! Trading conditions have been steadily improving since then , probably due to competition. Most of the spikes I see seem to be backed in other sources. Nevertheless, BS firms are not angels and any complaint that I read is a nudge for me to watch it and not be too trustfull.

isatrader · Jan 16, 2011, 8:52am

Quote:

Originally Posted by leonarda

I must admit i've decided my short strategy on stocks is to always use a guaranteed stop, as although underlying market prices are extremely unlikely to gap several 100%, spread betting prices can. I've found many historical examples of gaps of 500+%...

I’m not sure if you understood what I meant when I said about my risk method when shorting. Individual stocks can spike 500%+ like you described, so I’d stay away from them if they didn’t have the option to use a guaranteed stop. However, what I was saying was that the S&P 500 Index has never spiked more than 100% instantly as far as I know, so I feel much more comfortable to be able to use normal stops on it as the likelihood of that happening is very low.

isatrader · Jan 16, 2011, 9:01am

Below is the 4hr charts of the S&P 500 Rolling Spread and the S&P 500 Mar 11 Spread. It shows a huge down spike on the rolling spread. Would this have taken out a stop at a much lower level. I don’t know. Or is it just a mistake in their charts?

brettus · Jan 16, 2011, 9:05am

Quote:

Originally Posted by isatrader

Below is the 4hr charts of the S&P 500 Rolling Spread and the S&P 500 Mar 11 Spread. It shows a huge downspike on the rolling spread. Would this taken out a stop at a much lower level. I don’t know. Or is it just an mistake in their charts?

Surely a mistake, otherwise you could clean up.

leonarda · Jan 16, 2011, 9:06am

Quote:

Originally Posted by brettus

Are these stock splits?

I don't think so, google doesn't show a split then and IG charts show a step in price for them, not a spike.
I suspect it was an exchange opening spread/price irregularity due to the conditions back in 2008.

brettus · Jan 16, 2011, 9:08am

Quote:

Originally Posted by leonarda

I don't think so, google doesn't show a split then and IG charts show a step in price for them, not a spike.
I suspect it was an exchange opening spread/price irregularity due to the conditions back in 2008.

They never sort out the charts, so i can understand why you question it.

isatrader · Jan 16, 2011, 9:49am

Quote:

Originally Posted by pingvin123

You asked to analyze more charts/trades that you took, here is one more, the first chart that you posted I think... I can see the reason (I think) why you went short there, it is a resistance zone (at the top of the yellow arrow). Or maybe that was not the reason, it doesn't matter, I would like to point you to the important pin bars on this chart (from left to right):

- First reddish arrow pointing to the pin bars, price got rejected at 1250, you enter those a few pips above the pin, SL being a few pips below the pin. Would it work out? Yes on all 3 pins.

- Two bluish arrows pointing to the pins, price bounced from EMA, you can enter straight at EMA touch or wait for the pin to break. Would it work out? Yes on all 5 pins.

- Second red arrow pointing to the pin on the top, that one would work nicely as well, depends how you want to play it it you would move SL on the highs of 2 pins behind the price or expect retrace to probably go till your entry + a few pips in minus. I would close it probably and reenter on the highs of retracement after the yelow arrow.

- Yellow arrow pointing to the pin, that one would work as well if you would place position to BE or take TP at the bottom of the previous high. Do you see where the price retraced? Right till there!

- Last red arrow pointing to the pin at pivot zone 1260 (look at the left, see how the price stalled there, and now price got rejected from this zone). If I would still have short position open from the second red arrow or from the highs after yellow, this is where I would definitely close the positions and went long. Again depends how you want to play it, but most probably my TP would be previous bar lows (although the move up was very forceful, long bars, so I might have waited a bit as well). I would not dare to go short there, Price action does not support short trade at this time.

That's all from me, I hope you will find my input helpful. Take care!

Thanks again pingvin123. I’ve updated the chart and attached below to show the whole trade on the chart from the 4th Jan. My entry reasons were that price had retraced to value (the moving averages) after a strong down move and were at a resistance area that you mentioned. I was looking for for a retest of the lows and a breakdown through them. Which proved too be a bit to ambitious as the price tested the lows and then reversed on the 1pm bar on the 5th Jan and moved up strongly during the US session. I wasn’t able to monitor my position due to internet problems so was stopped out at my initial stoploss.

leonarda · Jan 16, 2011, 10:20am

Quote:

Originally Posted by brettus

Surely a mistake, otherwise you could clean up.

I guess all of these must be errors, no standard trade would go through at these prices, ie. they are just SB manufactured prices. It's just worrying they happen, and what's to say the SB company would say tough..

Jan 16, 2011, 9:01am	#35
isatrader Legendary Member Member Since Oct 2010 2,760 Posts	re: isa's short term trading journal Below is the 4hr charts of the S&P 500 Rolling Spread and the S&P 500 Mar 11 Spread. It shows a huge down spike on the rolling spread. Would this have taken out a stop at a much lower level. I don’t know. Or is it just a mistake in their charts? Attached Thumbnails __________________ isatrader Fate does not always let you fix the tuition fee. She delivers the educational wallop and presents her own bill – Reminiscences of a Stock Operator. Last edited by isatrader; Jan 16, 2011 at 6:18pm.

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