Avoid positive slippage

Discussion in 'Order Execution' started by Aetey, Aug 9, 2010.

  1. Hello propseeker

    I had to ponder your question a little;

    1) Assuming my trading style is similar to yours - I attempt to spot and ride trends.
    2) Assuming that you are using one or more technical indicators to generate an entry signal

    then,...

    It is OK Not to enter the trade if price action, desired slip or other metrics does not meet your expectation.

    Price action may turn down (if your long) suddenly - giving you a great positive slip, but you find yourself on the wrong side of the market.

    Price action may be on your side, but too much price action can be indicative of sudden volatility - in which case your protective(s) may fire prematurely - or you get a sudden correction after you have entered, panic and get out only to discover that the market is actually on your side - and your trade is bust.

    The entry signal that your indicator produces, is not a majic bullet.

    I look at several metrics after my entry signal is generated; I try to ascertain implied volatility, risk, and of course get a positive or zero slip.

    If the planets don't allign, then....Don't....Take....the.....Trade!
     
    #11     Aug 11, 2010