Limit Orders (LO)

Discussion in 'Trading' started by taoistmon, Jun 6, 2011.

  1. how useful do you guys find LO for entry?
    For exits?
    how does one determine an appropriate risk for the stock?
    ie. 10 cents, 20 cents, 50 cents?
    (i hear the guys from t3live talk about 50 cents pullback is normal for a stock that trades 2- 5 bucks daily range)
    to me... this sounds insane!!!!! i watch some of these guys hold stocks (tier 1 ,2 i imagine it is tier one is 500 - 1000, tier 2 is more than 1k) for more than a 50 cent retrace, but still continue to hold and still come out on top.. i am wondering how they can do this?
    i believe they are waiting until it is SOOOOO obvious the chart is no longer going to go there way do they exit. but they do not even exit right away (sometimes) they wait until it peaks retraces and then they exit. (to me... that is a stroke of genius if you are right - and the stock continues against you. or you are a chronic gambler)

    before I use to only enter with LOs , and keep adding until the price starts to move my way. it worked out at first but then i found myself constantly getting run over.

    then i started to Market Order (MO) my entry and (LO) my exits.
    but they never seem to hit my LO, esp when the price has run a little bit and has taken a pause
    During the first sight of a pause i send off my LO, which is usually less than a dime away from my entry , and the stock immediately retraces and i end up using a MO

    i use to just leave my LO out there, but do want to risk any more.

    but now i am getting killed on commissions. which is pretty terrible.

    i think i first need to train myself at identifying good opportunities to trade..

    ooo and on a side note.

    i was wondering what you guys would think about this 'hypo' theory.
    the stock will trade a certain way to make entries clear as day. but as soon as a trade is in place. the pattern/course of the chart completely changes. it may become more tight, have explosive moves, become very choppy... no longer smooth like what one would typically see.. (or maybe it is all in my head and i am watching the stock violently) lol
    but let me know what you guys think.

    ps. i am a newly enlightened newbie trader. so my entry is based on... the most ridiculous setup ever. i have been trading for over 3 years. and only now do i realize what a block head i was. pun intended...
    lets just hope it is not hopeless for me to recondition myself.