Position trading stocks

[Chartsy]

You should be able to speed up that process by using a stock screener formatted by indicators.

Surprisingly , just scanning for 20 day or 50 day highs gives some nice stocks lol

 

[Lee Shepherd]

To my surprise , when it should have been obvious really , I found stocks do move pretty much in tandem with the overall index.

They are the index.

 

[barjon]

They are the index.

......although weighted differently.

 

[barjon]

True , but using a buy stop order means opening up to potential slippage which would skew the risk reward negatively and make it difficult to manage . Imagine placing a buy stop for a stock at $10 , stop $9, assuming a clean fill a risk of $1 per share .

Imagine a weekend gap to $11 per share which automatically fills and now you have $2 per share risk which is much worse .

Of course I could use a buy-stop limit order to minimise this , but generally I just think it's easier to use a normal limit order , especially given I am entering on a pullback to an Ema

It's probably better to avoid having orders in during the hurly burly of the opening few minutes anyway because of the volatility and spread widening that can happen. So you'd avoid slippage from opening gaps. Appreciate that you are probably not around to get your orders in after US open.

The advantage of stop orders in my view is that the price is moving in the direction of the trade.

 

[Jason101]

Hey mate , yeh if I'm honest an all time high is definitely potential resistance , but in this case the high is so far away it almost seems irrelevant. Of course it still holds weight and I will cut the trade if the weekly prints a fakeout of the level.

As for A (Agilent technologies ) I think you're looking at a different stock maybe as it appears to be at 60 odd lols.

Hello,
No we have the same ticker, the high was at 6121, back in Jan 14 (see attached chart). It was a long time ago, I am probably more cautious than most, What I like to trend follow most is what I call "blue sky charts", as in there is no print on the charts above current price.

To my surprise , when it should have been obvious really , I found stocks do move pretty much in tandem with the overall index.

Of course certain stocks in certain sectors with certain patterns do offer more potential than a buy and hold imo but to up the risk to more than 4% would simply be taking on more than 4 stock trades at once , which I don't really find necessary .

Basically just a personal risk cap and cap on the number of trades I feel I can manage effectively

You have to do what is right for you especially risk wise. What I do is reach my maximum at risk point in longs and then allow to take a short trending trade (if the index's are long). Also I can increase my at risk percentage by trading bonds and commodities too.

Surprisingly , just scanning for 20 day or 50 day highs gives some nice stocks lol

Although not my usual scan, I find this too.

The advantage of stop orders in my view is that the price is moving in the direction of the trade.

I'm pretty much with barjon on this one. But I can see where you are coming from especially if some of your stocks are ill-liquid stocks or if you are buying on a pull back and using the recent high as a target of some sort, like a b/e point for example.

Can I just ask you Chartsy, if you are trend following these stocks and if so are you hoping to hold for as long as possible, weeks and months when possible?

 

[Chartsy]

Hello,
No we have the same ticker, the high was at 6121, back in Jan 14 (see attached chart). It was a long time ago, I am probably more cautious than most, What I like to trend follow most is what I call "blue sky charts", as in there is no print on the charts above current price.



You have to do what is right for you especially risk wise. What I do is reach my maximum at risk point in longs and then allow to take a short trending trade (if the index's are long). Also I can increase my at risk percentage by trading bonds and commodities too.




Although not my usual scan, I find this too.


I'm pretty much with barjon on this one. But I can see where you are coming from especially if some of your stocks are ill-liquid stocks or if you are buying on a pull back and using the recent high as a target of some sort, like a b/e point for example.

Can I just ask you Chartsy, if you are trend following these stocks and if so are you hoping to hold for as long as possible, weeks and months when possible?

Hey mate . Yeh I just had a look at A and thankfully it's just closed over that all time high so I consider it support if anything for now .

I try to hold on as long as the trend still has momentum , however long that may be . I use a mechanical Ema exit strategy to help with this (a close under the 6 week EMA) which hugs price well in strong moves

 

[Chartsy]

For exiting trades I have a mechanical exit if the weekly bar closes (emphasis on closes) below the 6 week Ema . However at times I also trail a hard stop too to prevent a shock sell off taking out all gains on a trade .

So for example I am now trailing my stop on BK from breakeven to 51 but will still close the trade in any case if price closes below the Ema .

at other times , too,such as a large parabolic surge followed by a very bearish candle , I will place an even tighter hard stop , it just depends . This is semi mechanical to allow minimal meddling with trend trades so trades can run , but still have a hard stop in place just in case

 

[Chartsy]

Got filled on CCE @42

 

[Chartsy]

BK printed a weekly wickish candle suggesting potential slowdown in momentum , consequently I am trailing a hard stop to 52

 

[Chartsy]

Stop moved to breakeven on CCE

 

[Jason101]

at other times , too,such as a large parabolic surge followed by a very bearish candle , I will place an even tighter hard stop , it just depends . This is semi mechanical to allow minimal meddling with trend trades so trades can run , but still have a hard stop in place just in case

Trend following can do your head in.
My exit is a close below a (daily) donchian channel, usually somewhere between a 10 and a 20 depending on the stocks behaviour.

And it is HELL!!! - This means I have to watch profits fall back away from me. After a good leg up I sit through price (and unrealised profit) falling back against me, often not to far from entry as it swings back down on a swing trade time frame.
At this point I have to grit my teeth, smile and remember I am a trend follower not a swing trader. Sometimes the move in my direction for profit is parabolic, it hurts. I used to trade a hybrid system between a swing and trend following system. Exiting 50% after the swing and holding the rest for following the trend. But if I have to be honest that was just to make me feel comfortable. For me the most profitable way to trade in the long term, is to hold for the long term trend to end while adding (a very tight entry price, with a fairly good win ratio is needed.)
So I try to look at a retrace (while still in profit) as - "That's great! A good time to add." But I do appreciate this will be very different for each and every trader. And did I mention it feels like hell!
I think this is why trend following is so hard, doing what feels uncomfortable.

 

[barjon]

.......And it is HELL!!! - This means I have to watch profits fall back away from me...........

Yes, and me it gives me far more mental grief to see this than it does to get out and see price go on without me. Never been able to change that mind set so cater for it by exiting to target - not slavishly, but tightening exit criteria at that point. If price keeps bombing along after I've gone I'll generally get a re-entry opportunity although not always.

 

[Chartsy]

Trailing stop on BK to 52.17 (big bearish pin bar, not taking any chances ) .

Stopped out on Agilent (A) for -1%

Cumulative return + 0.53%

 

[Chartsy]

New order on CH buy limit 7.53 stop 7.16 :nice base/flag breakout

 

[Jason101]

Trailing stop on BK to 52.17 (big bearish pin bar, not taking any chances ) .

Stopped out on Agilent (A) for -0.6%

Cumulative return + 0.93%

Hello,

Your stop on A was 60, which is less than the daily ATR, with such a tight stop, less than the daily ATR, I was wondering if you may not be better off using the daily chart.
Also, funnily enough your exit on A is just about setting up for an entry for me.

 

[Chartsy]

Hello,

Your stop on A was 60, which is less than the daily ATR, with such a tight stop, less than the daily ATR, I was wondering if you may not be better off using the daily chart.
Also, funnily enough your exit on A is just about setting up for an entry for me.

Hey mate ,

I agree my stop was too tight on A , I actually thought I placed it lower but yeh next time I will place a wider stop for sure .

At the end of the day though , tighter stops do give greater risk reward . Of course tight stops can shake you out but the nature of the setups I take is momentum/breakout/propulsion so imo it's better to play it that way (if the momentum just isn't there, no point waiting around imo)

I agree this is a good place for a dip buy on A, but again , buying pullbacks isn't really part of the method (though a good approach in its own right for sure )

As for using the daily charts , I think I may slowly start to use those , but for the time being all I have time to focus on is weeklies

 

[Jason101]

Hey mate ,

I agree my stop was too tight on A , I actually thought I placed it lower but yeh next time I will place a wider stop for sure .

At the end of the day though , tighter stops do give greater risk reward . Of course tight stops can shake you out but the nature of the setups I take is momentum/breakout/propulsion so imo it's better to play it that way (if the momentum just isn't there, no point waiting around imo)

I agree this is a good place for a dip buy on A, but again , buying pullbacks isn't really part of the method (though a good approach in its own right for sure )

As for using the daily charts , I think I may slowly start to use those , but for the time being all I have time to focus on is weeklies

HI mate,
Great post, which I would like to respond to later.
For now I thought I would let you know I have just placed an order to buy A at 6037 with a 101 stop @ 0.4% risk, TA done on a daily chart.
Normally I go in a bit bigger than 0.4R, but I'm breaking my rules on entry a little.
PS. Do you use guaranteed stops?

 

[Chartsy]

HI mate,
Great post, which I would like to respond to later.
For now I thought I would let you know I have just placed an order to buy A at 6037 with a 101 stop @ 0.4% risk, TA done on a daily chart.
Normally I go in a bit bigger than 0.4R, but I'm breaking my rules on entry a little.
PS. Do you use guaranteed stops?

Hey mate ,

To be honest , I'm not trading much live- just saving up a few grand and then going to fund this strategy fully with more capital. I use IG and mostly building my account up through fx gap trades. (I'm early twenties and skint haha)

Yeh, I use guaranteed stops , I think as a position trader the extra cost is well worth the protection from huge gaps and all that , be silly not to imo

 

[Chartsy]

New order on CH buy limit 7.53 stop 7.16 :nice base/flag breakout

I was filled on this but only after price gapped up massively then fell into the bid . Closing this position for a very small gain (call it breakeven )

 

[Chartsy]

ECPG New order: Buy limit 42 stop loss 40