Strategies to adopt when Market reverse on a scalping position

Jul 25, 2015
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#1
Hi guys,

You enter in a scalping position, few seconds later the stock reverse.

Considering for some reasons you don't want to wait your stop to be hit, what is the usual order type you scalping guys are using in this very instant ? Market orders ? Or do you still try to place a limit order or something ?

Thanks for your sharing.

(Been a long time i did not post here so a big hug to all of you btw ! ;)
 

rossored

Well-known member
Dec 18, 2002
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#3
If your stop is in the right place, then you have to make a commercial decision to either a) allow the stop to be hit and accept at that point that you are wrong or b) you reverse your position or c) you close the position before the stop gets hit. Market orders are going to be fastest and take you out at the price you submit it. A limit is only going to be effective at a certain price.
 

rossored

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Dec 18, 2002
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#5
If you're short, reverse and go long if you think it's going to go against you or vice versa?
 

rossored

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Dec 18, 2002
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#7
Each situation is different. You don't often have a lot of time to decide what's best and maybe there is no best. If your train is leaving the station, you've got to decide how much you want to pay to climb aboard. Market orders are going to be filled pretty much right away, but the downside is that you might get a slightly better fill with a limit. Personally, I normally go with market orders and keep my limits for trading within ranges, spikes, exits and situations where I may not otherwise have time to react.
 

NVP

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Jun 21, 2004
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#8
if you are wrong you are wrong .....get out as soon as yuor strategy is not working ......regardless of stop loss price

stop losses are just parachutes....designed for if the markets spike and you hopefully avoid a big drawdown off weak volumes and prices taken on yuor exit........but tell that to the Swissie Peg victims

even stop losses are not guaranteed ....
 

rossored

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Dec 18, 2002
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#10
I didn't intend to suggest it as a strategy, merely an option for this hypothetical situation. However, there are systems that advocate such a strategy and I for one believe that stop losses are more than just parachutes for spiking markets; they're a way of taking timing and emotion out of your trades, too, i.e the "it's gone past my risk level but it'll come back" strategy. No; just cut it and move on.
 

NVP

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Jun 21, 2004
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#11
I didn't intend to suggest it as a strategy, merely an option for this hypothetical situation. However, there are systems that advocate such a strategy and I for one believe that stop losses are more than just parachutes for spiking markets; they're a way of taking timing and emotion out of your trades, too, i.e the "it's gone past my risk level but it'll come back" strategy. No; just cut it and move on.
sure thing - we are all following different horses for courses R.........thats what makes trading so interesting !

N
 
Jul 25, 2015
5
0
11
#12
Each situation is different. You don't often have a lot of time to decide what's best and maybe there is no best. If your train is leaving the station, you've got to decide how much you want to pay to climb aboard. Market orders are going to be filled pretty much right away, but the downside is that you might get a slightly better fill with a limit. Personally, I normally go with market orders and keep my limits for trading within ranges, spikes, exits and situations where I may not otherwise have time to react.

Thanks a lot for your answer rossered !

stop losses are just parachutes....designed for if the markets spike and you hopefully avoid a big drawdown off weak volumes and prices taken on yuor exit........but tell that to the Swissie Peg victims

even stop losses are not guaranteed ....
Are you making a reference to the last january usdjpy flash crash here ?