Place your Stops first?

[options]

Well; I've just watched again.

I'm actually glad you brought this up. There is a lesson to be learnt here.

Are we watching the same video?

What the guy says throughout the whole video makes sense.

Put your stop in place before you put your trade on.
If it were to suddenly tank (And it does happen...often) you are then covered... and right side of the market to boot.

He is not saying we want to go long, so lets put on a short position!

I know only too well that when 2 people view a chart they can have 2 different opions of where the market is going.
Does this apply to what 2 people hear as well?

I really think it does.

No disrespect to you or anyone else. (Life's too short and I don't do that crap anyway.) But is this the underlying reason why we have a market in the first place?

The answer has to be yes!

 

[chump]

he tried to explain and then retried explaining why he prefers to put the stop in first ...he struggled to be clear ...BUT is first attempt was all he needed ...basically that was if your premarket planning was wrong and your directional bias was wong the stop saves you in the event that market action was too quick for stop placement after you made your entry... he didn't need to say anymore than that.

 

[Crap Buddist]

Well; I've just watched again.

I'm actually glad you brought this up. There is a lesson to be learnt here.

Are we watching the same video?

What the guy says throughout the whole video makes sense.

Put your stop in place before you put your trade on.
If it were to suddenly tank (And it does happen...often) you are then covered... and right side of the market to boot.

He is not saying we want to go long, so lets put on a short position!

I know only too well that when 2 people view a chart they can have 2 different opions of where the market is going.
Does this apply to what 2 people hear as well?

I really think it does.

No disrespect to you or anyone else. (Life's too short and I don't do that crap anyway.) But is this the underlying reason why we have a market in the first place?

The answer has to be yes!

Im neutral it has been brought up but just seeing how dangerous it is to enter a sell stop order first when the market has fallen 15 BIG s n p points. to initiate a short trade.

Re watch it, he says the markets at 20, we be buying at 10 but use (enter) a Sell Stop at 05 first, that way if the market tanks 15 big snp points from 20 through 10 hits 05, the trader will be short,

Selling into heavily falling prices from 20, im sure the market like this kind of trade from a rookie, but thats a big 15 point fall rookie traders will be selling into....

if this is how the guy trades, then good for him, but telling rookies to do that isnt everyones idea of a safe way to trade.

If he wants to go long why doesnt he just enter a buy stop order @10, stop 05. He doesnt does he ? nope, he says use a sell stop order first because I assume if it hits 05, then he considers this in his plan a good place to short the market, when its already 15 big points down.

how many points does that market travel in a day ?

 

[options]

Oh Jeez!
It's Sunday. I'm going back down the pub!

 

[Crap Buddist]

Oh Jeez!
It's Sunday. I'm going back down the pub!

nice one, just firing up a BBQ, we are brave, not quite summer temps but, thats the english for ya.

 

[fibonelli]

Just to add to this thread that I opened.

Reading through the excellent posts it seems that the advantages and disadvantages of this technique as I understand it.

You are on the right side of the new trend
But, you don't have a stop in place in the new trend unless you've done your homework before and worked out where to place one immediately.
But, if your original stop was either too close to the original trade or wasn't chart derived, you could get horribly exposed on a rebound.

My own view is that it is an interesting technique but to be treated with respect. I think anyone using this technique must do their homework very throughly.

 

[chump]

CP,
perhaps I also misunderstood him,but my take was that the stop order goes in as a preventative measure in case the directional bias anticipated and planned for proved to be incorrect ,But the sell would not then indicate a short bias ,but be used to be long to get out of the trade altogether until a chance to sit outside the market and plan arose ....he said he would rather be outside a market that was not doing what he expected than inside trying to get out..from that I would assume he would close the short and get out rather than assume he nows knows the market direction in a sense that he could trade to a plan.

LOL..no wonder there is a two sided market .

 

[new_trader]

CP,
perhaps I also misunderstood him,but my take was that the stop order goes in as a preventative measure in case the directional bias anticipated and planned for proved to be incorrect ,But the sell would not then indicate a short bias ,but be used to be long to get out of the trade altogether until a chance to sit outside the market and plan arose ....he said he would rather be outside a market that was not doing what he expected than inside trying to get out..from that I would assume he would close the short and get out rather than assume he nows knows the market direction in a sense that he could trade to a plan.

LOL..no wonder there is a two sided market .

I haven't watched the video and I am only giving the theory the benefit of the doubt because I don't have 24 years experience in the market. However, my broker (and I thought ANY broker worth the commission) would allow rapid order enteries, bracket orders or any other simultaneous order entry. So if you were trading a breakout strategy you would enter a BUY stop and SELL stop in the market simultaneously. If you were trading a current move you enter a market order with a STOP sent simultaneously, trailing or fixed. That's the way I trade.

 

[Crap Buddist]

CP,
perhaps I also misunderstood him,but my take was that the stop order goes in as a preventative measure in case the directional bias anticipated and planned for proved to be incorrect ,But the sell would not then indicate a short bias ,but be used to be long to get out of the trade altogether until a chance to sit outside the market and plan arose ....he said he would rather be outside a market that was not doing what he expected than inside trying to get out..from that I would assume he would close the short and get out rather than assume he nows knows the market direction in a sense that he could trade to a plan.

LOL..no wonder there is a two sided market .

yeah i thought that was original idea, and was thinking why not simply send your STOP LOSS order with your open to buy order?

But then he says and gives the example of using a stop sell order, to position for profits from the short side should your long order, which you havent entered yet not even make it @ 10, now if the market in that brief time, has fallen 15 big s n p points from 20, who would sell there ? most rookies.. ?

What was the days close before 07?, sell stop orders triggered 05, then what do we typically see after a rapid 15 point drop ? people buying volatility, or closing longs if enough sell stop orders have been triggered, for a dose of jonny upside.

maybe its his terminology, but he uses Sell stop orders? and mentions this will put the trader on the right side for short trade profits, but it could be the perfect long entry?

 

[Lightning McQueen]

As a newbie trader still under training, I came across this video from another forum.

Oscar Carboni, a 24 year veteran analytical trader, says that you should place your stops first before placing the trade.

Thanks fib for that link, and thanks Split for the heads up on this one.

Oscar rocks! - im going through the complete series, there's 82 of them so far....some good stuff in there. I like his use of Ma's for support and resistance levels - buy/sell areas - targets etc, right up my street lots to help in here.

I expect there is quite a bit of this sort of stuff on YouTube, I shall explore some more.

 

[options]

Ohhhhhhhhh!

My head hurts CB

I need CV's old logo where the guy is banging his head against a computer!

Come back Socs!

 

[Crap Buddist]

Ohhhhhhhhh!

My head hurts CB

I need CV's old logo where the guy is banging his head against a computer!

Come back Socs!

I understand, you dont need his logo, its simple isnt it ? entering a sell stop order will position the trader short, having a stop loss order will stop your long if its triggered.

lol, the guy uses a Sell Stop order, not a stop loss order ?

I try not to bang my head.

 

[Crap Buddist]

I think Oscar deserves his own thread, Wadda ya think?

This site could do with a bit of electricity.



I like his style.

Me too, he's like Rodney Dangerfields , off shoot.

 

[Lightning McQueen]

I think Oscar deserves his own thread, Wadda ya think?

This site could do with a bit of electricity.



I like his style.

Very good Idea linesniffer, someone in the T2W team should mail him and invite the guy to post, Im all for that.

Come on T2W invite the guy over before he gets too famous.

 

[new_trader]

I understand, you dont need his logo, its simple isnt it ? entering a sell stop order will position the trader short, having a stop loss order will stop your long if its triggered.

lol, the guy uses a Sell Stop order, not a stop loss order ?

I try not to bang my head.

CB,

I haven't watched the video and even if I did I'm not sure it will help me understand what you are saying....are you being sarcastic? :|

You seem to imply that a stoploss order is different to a SELL stop or a BUY stop order...am I missing the joke?

 

[Splitlink]

I haven't watched the video and I am only giving the theory the benefit of the doubt because I don't have 24 years experience in the market. However, my broker (and I thought ANY broker worth the commission) would allow rapid order enteries, bracket orders or any other simultaneous order entry. So if you were trading a breakout strategy you would enter a BUY stop and SELL stop in the market simultaneously. If you were trading a current move you enter a market order with a STOP sent simultaneously, trailing or fixed. That's the way I trade.

Yes, I agree. I traded with IB on the index and my stop went in, you could say, simultaneously with the market order. The bracket order was not necesary.

 

[Crap Buddist]

well what do you think he means when he says enter an order to sell 1 @ 405, before youve bought the market ?

he says place that order to sell first ? then he says because you have done this, if the market trades though 05 before hitting your buy order (yet to go in) by placing the sell order first the trader is able to profit from the collapse through 05 and be on the correct side ? since he says upside through 10 would seem unlikely,

but most people can enter a stop loss order with their market orders anyway . Cant they ? but does this guy mean if you use and enter a sell stop order of 1 lot first @ 405, then if the market comes down rapidly from 409/408406 to 405, you will be filled 1 lot short

sell stop order = order to sell at a price below current market.

he must mean that because he says next you see if you use this , then even though your long idea was wrong, you can make money by already being short ......


thats what i read into it...... so he must be net short to be in profit?

 

[Crap Buddist]

ohh the upside of it,,,,,, now same long idea, enter sell stop order first agian sell 1 @ 405, now thats in, now lets say the market trades 409/408/407 408/409 410, filled long 1 @ 410. your sell stop order is still in then acting as a stop loss order now, because your long was hit @ 410 first. and then if it trades back down to 405, your order to sell 1 with leave you flat and out.

thats what the guy means isnt it?

 

[fibonelli]

ohh the upside of it,,,,,, now same long idea, enter sell stop order first agian sell 1 @ 405, now thats in, now lets say the market trades 409/408/407 408/409 410, filled long 1 @ 410. your sell stop order is still in then acting as a stop loss order now, because your long was hit @ 410 first. and then if it trades back down to 405, your order to sell 1 with leave you flat and out.

thats what the guy means isnt it?

that's my understanding CB,

 

[Crap Buddist]

that's my understanding CB,

hmm yeah doesnt sound like rocket science but, selling 405 first short might not be a sensible thing to do, if the trader had planned the night before that he was trading from the long side. unless he had planned that selling 405 or buying 410 , either or whatever comes first, then i can see how some might use that, but if its plunged 15 points , 15 big points already then as a daytrader that may well not be a value short entry why aint he short @ 15-20 already ?

or put it this way short 405 might be the beginning of the end of lower prices to get long, but its very unlikely the end of the beginning to get short isnt it ? thats what i sniff of the situation anyways.......