Low Risk Entries

This is a discussion on Low Risk Entries within the Trading Systems forums, part of the Methods category; One of my fellow traders just Pmed me to ask what are the LOW RISK entries I said I would ...

Reply
 
LinkBack Thread Tools Search this Thread
Old Nov 4, 2003, 1:33am   #1
 
Grey1's Avatar
Joined Jun 2002
Low Risk Entries

One of my fellow traders just Pmed me to ask what are the LOW RISK entries I said I would open a thread..

Please add your fav low risk entry here


Strategy 1)

Always buy the second pull back from the HIGH of the day ..

( for exact entry point L2 helps a lot )



Same with the second rally on LOW of the day

I will add further
Grey1 is offline Commercial chat room   Reply With Quote
Old Nov 4, 2003, 1:56am   #2
 
Grey1's Avatar
Joined Jun 2002
Grey1 started this thread Strategy 2)

1) Deduct HIGH from the LOW of the day

2) divide this by 2.... we call this Maxmum permissible deviation or MPD for simplicity ...

3) calculate your VWAP

4) go short when price is MPD above the VWAP ( same for long )


In all cases use L2 for fine tuning ( first support or resistance will do )

This is bargain hunting and you need a scanner to identify these situations for you ..
Grey1 is offline Commercial chat room   Reply With Quote
Old Nov 4, 2003, 2:02am   #3
 
Grey1's Avatar
Joined Jun 2002
Grey1 started this thread strategy 3 )

Capitualtion sell off


When a stock closes well below its normal historical close due to down grade, bad news ( avoid profit warning news ) then take a long position // AMZN was sold off 8 % or MSFT was sold off 9 %

Reduce your positon size.. increase your stop loss to around 1% ( you are better off tohave a Money management stop than a set figure but i am only trying to give an example ) and let trade to run for 3 days...

Last edited by Grey1; Nov 4, 2003 at 2:52am.
Grey1 is offline Commercial chat room   Reply With Quote
Old Nov 4, 2003, 2:17am   #4
 
Grey1's Avatar
Joined Jun 2002
Grey1 started this thread Few tips

1) They tell you to buy high and sell higher.. This is Bu**S**
Always sell into strength and buy into weakness..( I fully understand the above reasoning but it is not suitable for day trading )

2) They tell you to buy the strong stock on strong sector
Wohoo .. donot do it... they fall faster if maket goes down..

3) As soon as you made profit raise the stop to entry ..

4) Use Money managment stop.. this is far better than TA stop.. This way you are in charge of your capitaL at all times

4) Learn to use L2

5) Take what market gives you and donot sit there for a reward/risk of 3 ..... You might have to wait a long time

6) LOOK AT THE WAY BARS ARE OPENED AND CLOSED..

7) AND LOADS MORE I LEAVE THE REST TO MORE EXPERIENCED TRADERS WE HAVE .. OUR CITY TRADERS
Grey1 is offline Commercial chat room   Reply With Quote
Old Nov 4, 2003, 8:42am   #5
The Staff are paid members that perform various roles such as editorial, advertising, support or technical work.
 
timsk's Avatar
Joined Mar 2002
Grey 1,
Fantastic thread! One question - I'm very confused about VWAP which I know you're very keen on. I've tried to do a search but can't seem to find a definitive explaination and method for calculating it. Could you provide a link and/or explaination please?
Many thanks,
Tim.
timsk is offline   Reply With Quote
Old Nov 4, 2003, 8:49am   #6
 
Lambchops's Avatar
Joined Apr 2003
Grey 1 - Can you put some charts up to illustrate your strategies?

Last edited by Lambchops; Nov 4, 2003 at 9:13am.
Lambchops is offline   Reply With Quote
Old Nov 4, 2003, 9:45am   #7
The Staff are paid members that perform various roles such as editorial, advertising, support or technical work.
 
Trader333's Avatar
Joined Jan 2003
timsk,

Here is a definition of VWAP:

Volume-Weighted Average Price (VWAP)- The VWAP for a stock is calculated by adding the dollars traded for every transaction in that stock ("price" x "number of shares traded") and dividing the total shares traded for a given trading day.

The calculation is:

VWAP = price x volume/ total Volume

But this creates a bit of a problem because you have to know the volume for every price increment. So it is sometimes calculated by taking the average price over 1 minute and using the volume at that average price.


Paul
Trader333 is offline   Reply With Quote
Old Nov 4, 2003, 10:21am   #8
Joined Jan 2003
Grey 1

"3) As soon as you made profit raise the stop to entry .. "

I am puzzled when people say this. Could you explain what you mean?

ie at what level of profit would you move your stop to break even.
presumably you dont mean "as soon as" you are in profit otherwise your stop would be one tick away from the market price and I would imagine 99.9% of trades would be stopped out at breakeven?

Do you have a minimum profit amount ie 1 x stop value before you move to breakeven?

Thanks

Darren
darrenf is offline   Reply With Quote
Old Nov 4, 2003, 10:49am   #9
Joined Dec 2002
Buy only when oversold on RSI 14 (below 30), sell when overbought on RSI (above 70), in both cases when the prise rise or fall seems to have stabilised and may be starting to reverse. Seems to be a consistent indicator.
For individual shares use L2 so that you can see how much or little support and resistance there is on the order book before placing a trade.
JTrader is offline   Reply With Quote
Old Nov 4, 2003, 11:53am   #10
 
Grey1's Avatar
Joined Jun 2002
Grey1 started this thread Darrenm,



I can give you TA reasons, ( some ATR away ...) statistical ( 1.2 SD or.. ) reasons but I am going to tell you a technique not documented but often used amongst TOP traders.. It is called
Spread stop..

Spread stop is when a trader decides to have a multiple of spread in the stock as his STOP Loss level and would raise his stop to entry when the stock moves X multiple of this spread above his entry ,,

Example

NTES has a spread of 7C ( just for the sake of the argument)

you then set a stop of say 14 C ( 2 times the spread ) as your stop ( in another word if you are wrong by 2 SPREAD THEN THERE MUST BE SOME THING WRONG WITH YOUR ANALYSIS IN THE FIRST PLACE ) and your first target of 14C for your profit.. As soon as
your first level of profit is HIT you move stop to entry .. )

Actually there is a nicer version of this technique. which would come under Low level Time frame asset diversification which I use myself .. It is dead simple and trader is under full control of his risk level at all times .. I will elaborate later..


Lamchop,

Please see the US thread for the chart of Second pull back rule

MY thanks to paul for explanation of VWAP . I have also posted a downloadable article in US thread about VWAP
Grey1 is offline Commercial chat room   Reply With Quote
Old Nov 4, 2003, 12:49pm   #11
 
Grey1's Avatar
Joined Jun 2002
Grey1 started this thread Tip of the day ( lol)

If the LOW or HIGH of the day happens during the first 30 minutes of trading BE SKEPTICAL about it.. Give much much more weight to the high and low after this period..

The first 30 minutes is pure PANIC.. Gamblers are all for quick buck ... Hence these levels are set irrespective of stock's internal qualities..

May I ask other traders to contribute to this thread as well .. it is kinda lonely on my own
Grey1 is offline Commercial chat room   Reply With Quote
Old Nov 4, 2003, 1:08pm   #12
Joined Sep 2003
Grey 1

Thanks for sharing those strategies with us - much appreciated.

Let's hope other experienced members will also be as generous.

Darren
darrren is offline   Reply With Quote
Old Nov 4, 2003, 1:44pm   #13
 
oatman's Avatar
Joined Feb 2003
jtrader, is your RSI on a 1min?
__________________
Every market has a bottom, every bottom has a hole in it.
oatman is offline   Reply With Quote
Old Nov 4, 2003, 2:12pm   #14
mma
Joined Aug 2003
* They tell you to buy high and sell higher.. This is Bu**S** *

As far as indeces go I agree , but there are some very notable exceptions - ie. emerging market stocks in bull markets .

* I LEAVE THE REST TO MORE EXPERIENCED TRADERS WE HAVE .. OUR CITY TRADERS *

you were doing well until this bit . you are not leaving us at the not too tender mercies of bank traders are you ?

Like Mr. Peter * dyke * young ??

Hellllppppppp !
mma is offline   Reply With Quote
Old Nov 25, 2003, 12:12pm   #15
Joined Apr 2003
Low Risk Entries
One of my fellow traders just Pmed me to ask what are the LOW RISK entries I said I would open a thread..

Please add your fav low risk entry here

Can somebody explain L2 in the following paragraph please

Thanks

Strategy 1)

Always buy the second pull back from the HIGH of the day ..

( for exact entry point L2 helps a lot )
Newboyneil is offline   Reply With Quote
Reply

Thread Tools Search this Thread
Search this Thread:

Advanced Search

Similar Threads
Thread Thread Starter Forum Replies Last Post
famous system with low cost ?!! vincent_f Trading Systems 8 May 20, 2007 5:35pm
Spread betting Forex with low leverage fxprocessor Spread Betting & CFDs 3 May 18, 2007 10:18am
Risk-hungry/risk-averseness Dispassionate Psychology, Risk & Money Management 6 Mar 6, 2006 8:39pm
a plethora of entries barjon Discretionary Trading 1 Dec 29, 2003 5:20pm

Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)