Price Traps

Discussion in 'Trading' started by Spectre2007, Feb 11, 2007.

  1. outlier price trap trading. Stop orders as entry orders, and limit orders to exit out with incremental gains. The trick is placing the orders outside the current ranges, and taking advantage of the need for price to travel through that point. With incremental profit modified by increased unit numbers.

    anyone else do this?
  2. I used to trade stocks that way but I never called it outlier price trap trading. I now only trade with market orders. I can't take the chance my limits will never be filled.

    CajunSniper / Administrator-Trader
  3. yeah the largest incremental gain you try to obtain the probabilities increase your stop gets hit/entry but your exit isnt. And you end up being stuck with a price vector moving away from your entry.
  4. Presumably you want to pick locations which are only hit with momentum. i.e. behind a large wall of volume, say. Then why cap the upside? Take half out on limit and let half run. Just an idea.
  5. Are we talking break outs here? I tend to fade them unless there is strong indication price is ready to move.
  6. no not breakouts, just using price vectors to capture incremental price gains, but resistance levels and support breakouts will lead to price slippage even if its incremental to reward a gain.
  7. look what happened in the spoos today. It was just a stop run session most of the day.