Buy high / Sell higher

[robocod]

Hi folks,

(I'm a new trader, just trying to learn the ropes. Still paper trading at the moment.)

So, I understand the maxim "Buy low / sell high": make an entry on a reversal or trough and sell on a peak or as the momentum starts to dwindle.

But often times, I might not be able to enter the market at that low low price. Perhaps I just didn't spot it, or it seemed too volatile at the time or something. The point is, for whatever reason I missed the low, but the price of the stock/index/whatever is now nicely trending upwards. What should you do? Just watch it? Make an entry and hope it continues to go up?

There's another maxim "Buy high / sell higher". Sounds fine in theory, but of course we can't always tell how much higher it will go can we.

So far I've been avoiding these scenarios, and I just watch the price go up and up, and wondering whether I should jump on; and of course you can be sure the moment I do, it will turn! What a quandary.

Any guidance? Either what to do in terms of making the trade, or in terms of psychology. Thanks.

 

[LiveTradingZone]

Trade Futures! That is some good advice lol. Open 24 hours a day

You can trade breakout's which I do often. Buy high, sell even higher. They do work. Trying to pick bottoms is useless. You really only get lucky if you buy a dead low or sell a dead high.

 

[TheBramble]

Mitchell & Webb

Smith & Jones

Amstrong & Miller

 

[robocod]

Trade Futures! That is some good advice lol. Open 24 hours a day

You can trade breakout's which I do often. Buy high, sell even higher. They do work. Trying to pick bottoms is useless. You really only get lucky if you buy a dead low or sell a dead high.

I'm not talking about getting in on a yearly-low or something, I didn't mean that.

Take your example of a breakout (or a reversal). If I see this trade developing, I can get a feel for it, where it is going, where to place my stop, what a reasonable target price would be. I feel comfortable with this (following my risk management strategy).

But suppose I missed the breakout or reversal. The stock's now trending up, already up 10 points say. I didn't get the "low" of the breakout/reversal, I can only enter say half-way up the up-trend... only we don't know it's half-way do we.

In the past I've just been too nervous to put the trade in, or I've put it in and it has turned on me. So, I've been keeping clear of such trades, and only going for the trades where I get in from the (local) bottom (i.e. where I catch the breakout as it happens).

But actually, even writing about this and thinking some more, I guess I answered my own question: I still have to estimate a target price to find how much it will go up, and then just apply my risk management strategy given where we are.

I think my "problem" is more the pyschology issue. I guess I feel more confident about the trade where I saw the breakout happen rather than just stumbling upon a trending stock that's already made its break/reversal. (It felt too much like "jumping on the band wagon" if you know what I mean). But, if I use my new-found confidence in my risk/money management strategy maybe that's all I need to do.

 

[futuresforex]

Well if the market is making new highs then you have a few options:

1. If you missed the trade, then you can say that you will not chase the market, and just realize that the market is making the move without you. There is nothing wrong with that as you do not want to chase the market and take a loss. Instead focus on the next market that will make that same explosive move and focus on getting in early in that market before it makes its move.

2. The other option is to look up trend continuation patterns and signals. There are certain tools and techniques that can help you get a decent entry into a strong trending market.

My preferred method is to just realize that the market made the huge move without me and just look for the next market that will make the explosive breakout.

 

[AlexLutiera]

Trade Futures! That is some good advice lol. Open 24 hours a day

You can trade breakout's which I do often. Buy high, sell even higher. They do work. Trying to pick bottoms is useless. You really only get lucky if you buy a dead low or sell a dead high.

LiveTradingZone is right! It is good to have it as BUY HIGH, SELL EVEN HIGHER. Some may be contended if they buy something which is at a high price whether it is a stock, a goods, or whatsoever. Of course, we would look at the case where in, if we buy something, we should sell it higher, not to have a break-even. We would sell something that has a good impact and quality for the people. Who does want to buy something if it is not good, right?? Did I make a point here? Lol.

 

[shulink]

Buy high sell higher is a good strategy for day traders. However, I still prefer to buy stocks at their support level and try to sell at a higher price, preferably near the resistance level. I can set my stop loss a little below the support to minimize my losses when I'm wrong.

 

[JRP2891]

Hi folks,

(I'm a new trader, just trying to learn the ropes. Still paper trading at the moment.)

So, I understand the maxim "Buy low / sell high": make an entry on a reversal or trough and sell on a peak or as the momentum starts to dwindle.

But often times, I might not be able to enter the market at that low low price. Perhaps I just didn't spot it, or it seemed too volatile at the time or something. The point is, for whatever reason I missed the low, but the price of the stock/index/whatever is now nicely trending upwards. What should you do? Just watch it? Make an entry and hope it continues to go up?

There's another maxim "Buy high / sell higher". Sounds fine in theory, but of course we can't always tell how much higher it will go can we.

So far I've been avoiding these scenarios, and I just watch the price go up and up, and wondering whether I should jump on; and of course you can be sure the moment I do, it will turn! What a quandary.

Any guidance? Either what to do in terms of making the trade, or in terms of psychology. Thanks.

If you're buying new highs or selling new lows and trend following (these two go hand-in-hand) you're not trying to predict how far the market will go, instead you stay in until the move or trend is over. You'll have a relatively low success rate however if you're truly buying significant highs or lows, then the few winners take care of any previous losses as well as giving you your profits.

I've traded most types of directional trading, retracements, value, counter trend, etc.., and now i won't go near any market unless it's very strong or very weak; buying the highs and selling the lows respectively. I appreciate there's many ways to trade, however personally speaking you couldn't pay me to trade another way now. As the old cliche goes; you have to find a set of beliefs linked to a methodology which matches your personality.

 

[Black Swan]

Re: Buy high/Sell higher

I was re-reading Street Smarts last week, I was reminded that the sections on the systems/techniques covers buying higher/selling lower on (iirc) a 20 day H or L. It *works*. But as the authors LBR and Laurence Connors are constantly at pains to point out most systems work if the MM and psyche are sound...They also make reference to Le Beau in the book, a technician whose opinion changed my trading life.

 

[Scotty2Cues]

Hi folks,

(I'm a new trader, just trying to learn the ropes. Still paper trading at the moment.)

So, I understand the maxim "Buy low / sell high": make an entry on a reversal or trough and sell on a peak or as the momentum starts to dwindle.

But often times, I might not be able to enter the market at that low low price. Perhaps I just didn't spot it, or it seemed too volatile at the time or something. The point is, for whatever reason I missed the low, but the price of the stock/index/whatever is now nicely trending upwards. What should you do? Just watch it? Make an entry and hope it continues to go up?

There's another maxim "Buy high / sell higher". Sounds fine in theory, but of course we can't always tell how much higher it will go can we.

So far I've been avoiding these scenarios, and I just watch the price go up and up, and wondering whether I should jump on; and of course you can be sure the moment I do, it will turn! What a quandary.

Any guidance? Either what to do in terms of making the trade, or in terms of psychology. Thanks.

Buy in the middle?

 

[shewolf]

Buy high sell higher is a good strategy for day traders. However, I still prefer to buy stocks at their support level and try to sell at a higher price, preferably near the resistance level. I can set my stop loss a little below the support to minimize my losses when I'm wrong.

A very conventional way to trade. You need to know the amount of percentages that the trade will bounce off the support and resistance levels for that particular time frame.

 

[Jason101]

Mitchell & Webb

Smith & Jones

Amstrong & Miller

All double acts, that work well together.