How do you enter?

Discussion in 'Trading' started by Kicking, Jan 13, 2004.

  1. I was doing some research on Larry Williams and came about the Robbins World Cup advisor website. I found something interesting; a lot of the winners like John Holsinger whom I had read about in Futures Mag etc, enter the market with a stop.

    I find this a bit surprising especially since some are CTA's so obviously they don't trade 5 lots. Personally I never enter with a stop I thought about it for some setups but I always feel more comfortable with a limit(or market) the reason being I enter on a reaction not thrust. But these guys's track record speak for themselves. Does that mean they mostly trade break out systems? Aren't those systems only good in strong bull markets? What do you think? how do you enter?
  2. F. d'Anconia

    F. d'Anconia Guest

    Usually on a reaction as well, but if its a high beta listed stock thats like $80 to $100 per share, I have would rather use a stop and let the momentum carry me.

  3. T-REX


    Trend following systems do well in trending mkts.
    That is why breakout systems work so well.

    Larry Williams daytrades the spoo just like the rest of us.
  4. I may be overly cautious or too analytic but when I am trading seriously (yes, I spend more time on a demo simply because I am learning more than I trade these days) I will "stake out" a pair (currency trader) a week to 10 days out and study it (due to various dynamics) - maybe trade it on my demo.

    With a breakout trade (based on some overreaction to an announcement or news story) sometimes I will already have set my exit(s) and mostly never trade with a mechanical stop, since, if I am so far off on my basic strategies and reasons of why the price should go (continue going?) from point A to point B (where I would close my position) as I had planned then 1) a stop won't help me; 2) that (error) will tend to show up early so I can cut my loss and 1) re-examine the trade on the fly (yes, sometimes something will show up and I can make an adjustment) then re-enter, as long as the entire trade goals/structure stay the same in relation to why I chose this pariticular trade to begin with, or 2) try to stay outside the market and determine why I was off, so I can be better next time.

    That's an advantage currencies have over stocks in that, I was never able to use a live/demo to trade in the NASDAQ when I did in '99, but now there are lots of demos I can trade pairs on.

    All the components of why I planned the trade have to be present before I enter and the trade must go according to plan after I enter or else I toss it and move on (sometimes with a loss, sometimes with a profit).

    I could refer to this as a "model" trade. Most important thing: All the dynamics have to show up AFTER I enter the trade as well. If they don't - same exit strategy.