Stock: For the past month I have been solely concentrating on scalping listed stocks, and what I've discovered is a problem similar to yours. I've cut way too many of my profits short. All of my exits have been based primarily on tape reading, with a few based on short term support and resistance levels. It's just too easy to get shaken out of a position when you're worried about locking in a profit though so I came up with a simple but somewhat effective strategy. If I want to exit the position based on the tape, I now only exit half of the position (unless it is extremely obvious that I need to get out completely). I then use the five minute candlestick chart to determine my next exit (I've found that five minutes is good for filtering out the wiggles for the stocks I trade). If I get a reversal signal (bearish/bullish engulfing pattern, doji, etc) then I take my final exit. If I don't get a clear cut reversal signal, I use a stop based upon the opening of the most recent dominant (med/large real body) candlestick, although you can always just use a trailing stop if you prefer. It's helped me capture some larger gains during the trending hours (9:30 - 11:00 & 2:00 - 4:00) without risking the whole gain. As for the 11:00 - 2:00 zone I have found that overall I'm better off taking small scalps if I do any trading at all, so I don't use it. DeeMan
Stockk, That is probably the number one question for all traders. I think you have to have some method for assessing how likely the day is to be a big trend move type day. Those days you want to try very hard to hang in there all day if possible. Personally, I watch some breadth indicators and the tick, and pay attention to whether the futures take out the first hour highs and hold it. Of cousre you get these days only about once every two weeks, but they can make your month.
luv -$51 xal ripped at the open and I lost money on this stock??? My mistake got in too soon, and in a thick stock like this I am just asking to be shaken out!! Got filled at 9:34 at $18.53. There was a 10000 bid at 52c, 53c printed for 10000 shares, and I should have know that cleans out the buyer, even on a thick stock like this and there will be a pullback. Sure enough next bid 51c, for 100 shares. I got out at 45c, that was the low!!!!!! and the stock went up to 75c!!!! Too trigger happy on this. LM $133 Usually not my favorite stock to trade but the sector is just too strong today not to trade it. Got in at $49.70, and the stock prited 99c??? Not a good sign why not ptint the fig.? The third time he printed 99c, I got out. I was right, as he printed $50.00 for small shares and bring the stock down to 80c, before coming back up and closing at $50.22. AMR $118 Could have been a $1500 dollar winner!!! xal shot straight up and I got into one of the strongest stock!! but I got out with 20c profit? The stock closed up $1.72!! Ouch. Got filled at $22.10, again I looked at the tape too damm much, should have just held it, XOI and OSX was tanking hard another confirmation that xal is going to be a strong sector! Went as high as 37c when a 15000 shares offer came in. Put my stop 1c below that and got stopped out, stock printed as low as 34c, before going back up and the 37 offer was taken in 2 prints and the stock never looked back. BJS -$36 OSX was so weak and when it squeezed, I thought we are rebounding! Got in at 25c, at 9:47 even when there is no real bid supporting the stock, almost immediately 12000 shares came in at 25c, and I have to get out at 20c. Low of the day was $29.20. So I did the right thing. NEM -$21 Tried a gold stock when XAU ripped in the middle of the day, NEM actually opened down 70c, but the problem with this stock is that it is so thick and I got stopped out on numerous shake outs. Should have went into AU, a thinner and more manageable stock. Got in at $18.84 at 10:03, again 10000 shares came in at 85c, stepped down and then 70000 shares at 83, I got out at 82c, low of the day was 70c, but still since this is my first time traded this stock I did the right thing by getting out, eventhough the spec. shows real size. EOG -$119 Worst trade of the day, at the best point I was up $70 and the worst point -$206 in this stock???? What happened? XNG sold off without even a hint of uptick and when it finally squeezed, I went into EOG, thinking that we are going to rally. I never materialized. I got in the first time at around 11 am, at $37.25 and sold it 20 minutes later at $37.32. Went back in at 1:20 after it broke the 50c level, got filled at 53c, and 5000 shares sits on the offer all day, and kept refreshing, and then all of a sudden the whole sector tanked at 2pm. !!! In a matter of 3 minutes the stock went from 60c to 20c. I couldn't get out as it happened so fast, I was basically stunned. Then 20000 shares came at 20c, I thought I had to get out. But I should have realizes the low was at 17c, and I got out 1c above it !!!!!!!!!! Excellent!!! Speaking of deer in a headlight!! When the selling was done and the stock didn't break the low, I went back in, at this point I was down $160, the stock flat lined and did nothing for an hour and then started to tank again making a new low at 67c, and finally rallied to close at 35c. Why am I trading EOG today, there was absolutely no reason for me to get in this stock. SGY -$39 Same as above, I thought it won't break the 50c level which was the low of the day, I got in at 54c, and when it finally broke, I got out at 48c. COC -$28 XOI looks like it was going up at 1:50, and got in at 20c, with a 4800 bid at 19c, stock traded as high as 23c, and when the 19c was hit, I got out. The stock went as low as $28 before closing at the 25c. NI $18 One of the strongest XNG, still think that we are going to bounce at 3pm. I got in at 54c, and the stock printed 79c and 78c, on a spread up and I couldn't get out, held on to it another 30 minutes and when XNG makes a new low, I got out with minimal gain at 60c. The stock closed at 66c. MXT $13 Credit card stock, AXP was up 40c for the day, I bought MXT looking for a 3:30 rally, unfortunately the stock wiggled too much today and I got out at $25.68c. The stock went through the figure and closed at 04c. DAMMMMMMMMMMMM. The stock did what I though it would do, just have to have a little bit more patient next time. ADP $88 Another 3:30 rally and I bought it at $58.27, got a little crazy at the end as the stock spreaded up and down 15c at time and I got out at $58.47, the stock closed at 50c. But at one point got spreaded up to 76c. Another day went down the tube, I was up more than $200 the whole day until I went into all the XNG stocks and got killed in EOG, lost all my profit and at one point I went negative by as much as $100. Again I was lucky to be bailed out by a mini rally to the close and ended the day up $29. The strongest sector today was SOX and I didn't even look at them , usually a very choppy sector trended very nicely today, I have an inkling that anyone that went long semi's would have made a lot of money!! But my sectors are the OSX and XNG and the past few days they have been untradeable. Have to look for a greener pasture, if this continues.
"the day up $29" Does that number include commissions or not? Can you post your commissions for each day? Thanks!
I believe commissions really take a bite out of a person's trading profits. I believe if there were no commissions, some break-even traders would make a considerable amount of money. And the learning curve for new traders with improve. I like to gauge the commission to profit ratio.
Have you tried using the H/L of 1 to 5 minute bars for short term trades, and even 10-30 minute for longer term? Takes the fear/greed out of equation. I try to look at trade from different time frames and use trendlines as well for guidance, not for entry/exit. I use this same method on daily bars (swings) also, coupled with intraday exits successfully.
you will find out what the best exit strategy is... otherwise you will be forever yoyo-ing between taking quick profits and trying to let it run. I know the answer, but I am not gonna tell you for free.
my grandmother used to say "..and if a bullfrog had wings he wouldnt bump his ass on the ground.." =) -qwik
I don't know if Dozu uses intraday bars in his system, but through backtesting you can discover the ideal intraday bar to use based on time of day, but you'll have to discover them yourself. I think a lot of successful people use s/r on intraday bars for an entry/exit strategy and won't admit it for fear of people grouping at key points on those bars and causing air pockets.