You'd think by now I would have learned to stop overriding the system....... but Noooooooo I still make the stupid mistake now and then. Congrats to those of you that made money today on this trade! - Spydertrader
First, let me clarify. I failed to follow any rules when I exited the IIG trade. I allowed fear to influence my decision and shake me out of a good trade. Dumb! With respect to when one should exit, I have several rules, and each should be used depending on where we find ourselves in the price cycle. 1. First Day (Ross's Rule) After entry - Exit when a 2% loss in equity price occurs (from entry price) or price heads into the negative (red) for the day (not since entry, but compared to previous day close). This is known as Ross's Rule. At EOD - Exit if volume does not exceed FRV prior to the close. 2. Beyond First Day Trailing stop - Exit anytime the 5% trailing stop is hit. If using an alternate stop strategy, exit when stops are triggered. 3. Peak Volume Exit within the first 15 to 30 minutes on the morning after peak volume is reached. 4. Price Target Consider an exit when price reaches the target price of 10%. This is more of a soft exit and requires an analysis of price location with respect to trendlines (Jack's and Nwbprop's Channels), how far the price has appreciated the entire run up (not just since entry), determining if the stock gapped up or not, and continued (or nonexistent) increases in volume. 5. Time Exit after four days if no other exit criteria have been met. Jack Hershey uses a six to eight day time stop. - Spydertrader
To clarify, you eyeball the stop while monitoring intraday, correct? This is not an automatic trailing stop on the bid...? In your experience, do you see an disadvantage to using an automatic trailing stop? smtrader
Correct. I monitor the price, rather than place an actual stop order with the broker. I use a mental stop and improve it in parallel with price appreciation. When I first started trading, my broker did not have an automatic trailing stop order. It became a real pain in the backside to constantly cancel and replace my stops. As a result, I moved to mental stops, and now, I do the same out of habit. - Spydertrader
Currently, my broker offers a stop that automatically trails the bid. In other words, you set the stop 1 point below the bid on a long trade, if the bid moves up 1 pt, your stop will automatically move up 1 pt with the bid. However, if the bid then moves down a half pt, the stop remains unchanged (and you remain in the trade). If at any point the bid decreases 1 pt from the highest bid, you get stopped out. No need to constantly cancel/replace. The only disadvantage to utilizing my broker's automation that I can think of is that I can then become 'creative' with my exits. However, I tend to make mistakes when I become creative. I have long felt that if I have the opportunity to set up an automatic trailing stop, that I should, as it would not allow me to break my own stop rules. Of course, I imagine not all brokers allow this. At some point I would like to use Jack's stop offset method in tandem with an automated stop, but I am not quite that proficient yet.
2005-07-05, Wednesday - Update Stocks Exceeding FRV levels by EOD IIG MFLX Stocks NOT Exceeding FRV levels by EOD DCAI EZPW TASR As a result, I continue to hold all shares of MFLX until at least tomorrow. I also continue to kick myself in the ass for selling my 2000 shares of IIG earlier today. <img src=http://www.elitetrader.com/vb/attachment.php?s=&postid=785003>
2005-07-08, Friday - Lists Hershey Wealth-Lab Chartscript Culling Methodology Hershey Chartscript Scans / Qcharts Culling / Stocktables.com Sort Hot List FORD IIG MCRI Dry Up Stocks DCAI FORD JMDT JUPM TASR Hot List Stocks Scores FORD - 1 IIG - 7 MCRI - 5 Dry Up Stocks Scores DCAI - 1 FORD - 1 JMDT - 0 JUPM - 5 TASR - 0 Keep an Eye on These Stocks TASR (Attached) <img src=http://www.elitetrader.com/vb/attachment.php?s=&postid=785189>
Spydertrader Even with my own data (CSI-data)and wealthlab and the web based chartscript on the wealthlab homepage I don´t get JMDT in dry up. I think this difference is worth of discussing, because I may doubt my own calculations. Best regards, Helmut
Thanks Spyder This is a good thread. I have noticed that you have added an innovation with the "dry up bands". Can you explain briefly how you developed these bands? Best Regards Oddi