You need to register separately on the Chart Forum
- see Chart Forum Help
Edit Profile Profile Help Help
Forum Rules Forum Rules Advanced Help/Instructions Advanced Help
Search Last 1|3|7 Days Latest Posts Latest Posts
Search Search Forum Tree View Tree View
   
Trade Trends with Bollonger Bands and Twiggs Money Flow

Trade Entry/Exit - Dollar Cost Averaging

Chart Forum » Trading - Systems » Trade Entry/Exit - Dollar Cost Averaging

««  Previous  Next  »»


 
Thread Start New Thread 
Last Poster Posts Pages Last Post
         

Author Message

Top of pagePrevious messageNext messageBottom of page Link to this message
muzza
Member
Username: muzza

Post Number: 376
Registered: 06-2003

Rating: N/A
Votes: 0


Sunday, March 12, 2017 - 08:03 pm:Copy highlighted text to 'New Message' boxEdit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Hello All,

In another thread (Early Stage 2 Weinstein's candidate)

https://forum.incrediblecharts.com/messages/316907/769746.html#POST183603

A discussion spawned about how one might go about trading breakouts given the low percentage of breakouts that ultimately lead to strong stage 2 growth trends.

Rather that distract that thread from its Weinstein discussion I am answering a question here posed to me by shadetreetrader regarding scaling entries & exits.

So this is not about a full Trading System discussion, rather a component of it.

FWIW I have an approach synthesised from Elder Triple Screen and others, and as said elsewhere I am not a short term player (Intermediate to Long term). That said I continue to try to learn and experiment to see if I can make money in shorter terms, but (honestly) for the most part my temperament is probably not suited to those time scales.

Here is a Weekly Chart that shows an open trade in my attempt to amplify what I have already written, which is not that complex.

NAB1

I will limit my post to the weekly, for simplicity, but the other data below will give insights to where I entered.

My system signalled a turning point for NAB back in AUG 2016. And I took the trade on a BearPower divergence signal.
While the weekly does not show this as a "breakout", the breakout is there on the daily, with a strong correlation with an Elder "Impulse" signal.

Getting back to the purpose of this thread, I dollar cost average into a full position that I am aiming for, so I entered at approx 25% of what I wanted to build into on 9/8

In the week closing 23/9/2016 I got another strong signal that the trade was going my way - a retracement prior followed by several Green Candles. So I added to the position in the following week, another approx 25% of the desired total position.

At the end of the day I entered I was happy to see another strong Elder Impulse signal (on the daily).

The stock then churned up and down, but I was comfortable with where the S/L had trailed to -- I got nervous on the big down in the week of 4/11, but the stop was not hit. Began to breathe easier when I saw the big green candle of the following week. Almost an "Engulfing Bull" Candle, which indicates plenty of gas left in the tank.

In the week of 18/11 I got a signal that I could consider taking some partial profits, but given my analysis on the re-rating of NAB I chose not to, this was always going to be a long term play. (There are some discretionary elements to my system).

So I added to the position on 21/11 given I also saw another strong Elder Impulse indication on 17/11.

The stock continued to rally, and then retraced in early Jan 2017, respecting its 12Wk EMA. And when I saw the MACD (on the daily) separating again from its signal line, and given the weekly had respected its EMA, I added a final parcel to the position.

So as of 13/2/2017 I have a fully loaded position on this stock.

An extract from some tracking spreadsheets is below, given the the questions posed were (a) how I go about it and (b) surely brokerage consumes profits.

NAB2

Clearly any dollar cost averaging approach has increased costs re Brokerage.

But to my mind it does help manage risk, and risk adjusted returns are what I seek.

No system is perfect, and what I currently do isn't either.
(I continue to do back-testing etc., and the system gives me some confidence - but often times find backtesting can lead me into analysis paralysis with Betas, Sharpe Ratios and the like!).

When things go against me, I have typically not spent the dollars on additional brokerage, so under those scenarios the trade is akin to a simple entry/exit at 1/4 the desired position.

I hope this helps some folks, and I can add no more to give insights as there is nothing more material to add!

Please feel free to add your experiences with respect to how you manage breakout entry / exits so that we an all learn

Best Wishes to all.


Top of pagePrevious messageNext messageBottom of page Link to this message
shadetreetrader
Member
Username: shadetreetrader

Post Number: 858
Registered: 02-2014

Rating: N/A
Votes: 0


Monday, March 13, 2017 - 07:30 am:Copy highlighted text to 'New Message' boxEdit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Thanks for putting the time & effort into describing your scaling in method Muzza.
I have some questions, but understand if you prefer not to disclose details.

If the blue solid & dotted line is the initial exit then the trailing S/L, then you add additional positions before the trailing S/L has risen above the previous entry point?
The reason I ask this is when I have previously scaled in, I waited until the S/L had risen above the initial entry, in order to reduce risk as much as possible but this has the disadvantage of entering much later in the trend.

Are the purple exit labels indicating the green M/A and what is their significance?

So the idea behind your scaling in method is you increase the risk as the trade progresses in your favour until you have a full position.
In the long run, the increase in brokerage on winning trades is compensated by reduced losses on losing trades.

I shall try this out in the next ASX share trading game, but use daily charts to suit the shorter 3 month duration.

Regards stt







My posts should not be taken as stock recommendations or advice.
If the band's playing a Waltz, don't do the Fandango.

Top of pagePrevious messageNext messageBottom of page Link to this message
colin_twiggs
Moderator
Username: colin_twiggs

Post Number: 2105
Registered: 06-2009

Rating: N/A
Votes: 0


Monday, March 13, 2017 - 10:28 am:Copy highlighted text to 'New Message' boxEdit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Thanks Muzza for the detailed answer.

For purpose of discussion, here are alternative hypothetical trades and stops to illustrate scaling in to a long-term position.

NAB

Key differences:
  • Later start. I would not normally commence below $29 but the setup at $28 looks worthwhile with rising TMF and breakout above descending (broadening) wedge.
  • Add to position on breakout above $29 (after follow-through).
  • Wait for correction to recover above $31.
  • Add to position on breakout above $32 (after follow-through).

Placement of stops seems similar. Give the trade plenty of room to breathe. The next level would be $32 but only after respected by a secondary correction.

(Message edited by colin_twiggs on March 13, 2017)


My views expressed on this forum do not consider your personal circumstances and should not be considered as financial advice. Please conduct your own research.

Top of pagePrevious messageNext messageBottom of page Link to this message
muzza
Member
Username: muzza

Post Number: 378
Registered: 06-2003

Rating: 
Votes: 1


Monday, March 13, 2017 - 07:00 pm:Copy highlighted text to 'New Message' boxEdit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



G'day Shadetreetrader and Colin,

Shady -- let me try to answer you queries as best I can

If the blue solid & dotted line is the initial exit then the trailing S/L, then you add additional positions before the trailing S/L has risen above the previous entry point?

I think you mean initial entry? -
The Vertical solid blue lines are only there to give to a "tag" on the weekly as to where I entered (the exact day of entry was in the text and tables).

The Horizontal Blue Lines are Support Levels (or Zones).. and the dotted blue lines were my quick hack attempt to illustrate the correlation to where I placed Stops.

Your question re S/Ls is very pertinent, and thank you for sharing what you do, I will most certainly reflect on that.

Over the years I have occasionally be hit by S/L raiders, and while I am not a high frequency trader, I gotta tell you that hurt.

I have experimented with less conventional approaches like chandeliers etc., but don't have a "silver bullet" regarding this.

So what I do currently is set stops MANUALLY, by looking at support zones more then levels per se.

And as Colin put it so eloquently, I try to give the Trade room to breathe.

On the chart I posted, the iS/L (initial S/L), was set by looking at the Double Bottom, AND, where I computed the lower envelope in my system (based on ATR etc). So that meant an initial S/L of between 24.2355 and 22.9898 .. "Technically". The first level (in my view) left me open to a S/L raid, its kinda the obvious one. The second was voted out by my money management rules. So I chose 23.3 as a reasonable compromise (just below the average of the two).

To the second part of your first question - YES my system allows me the discretion to increase the position if things look good. And I have been known to do so before trailing the stop.

Now, to be completely transparent, my system did "yell" at me about this. But my approach blends a Technical View and a Fundamental View of the stock where I am taking bigger positions like NAB. So my discretion was to ignore the warning. Time will tell all!!

(FYI When I do punt on say a penny dreadful in the mining sector then I obey all warnings with religious zeal!).

Are the purple exit labels indicating the green M/A and what is their significance?

The Blue MA is a 12Wk EMA.
The Green MA is a 26Wk EMA
The Purple Dotted Lines are an envelope computed from Price, MAs and ATR.

My system (which is continuously under development), tries to signal Long and Short conditions.
LE - Long Entry
SE - Short Entry
LX - Long Exit
SX - Short Exit
S/L SE - Stop Loss Short Exit
S/L LX - Stop Loss Long Exit
The colours are kinda arbitrary - Green (Happy), Orange (For Longs and other, Warning / Sad .. didnt want to use red to clash with candles), Purple (Warning / Sad for Shorts), Dark Plum Price Bar (Alert to sell potentially)

I probably should not have left these labels on the chart, as the symbols and warnings are still being refined. I am comfortable with how turning points are working out for me, but as yet my coding has not (yet) correlated, for example a Short Entry with a Short Exit.

Hence I am not totally mechanical yet.

For the moment, and in the context of answering your question, the purple S/L SE label should be interpreted thus .."If you are SHORT then you had better consider running away".. and I as yet need to correlate this with a previous SE condition to eliminate noise.

There is no correlation to the Green MA, its just where the software plonks the label.

It IS correlated to price bar.

So if you take the most recent S/L SE warning, given the price bar rallied and closed above the 12Wk EMA, on reasonable volume, etc. the warning was generated.

In the week following I got a "Turning Point" Signal -- and along with the S/L SE plus BearPower Divergence etc it was crying out "Go Long".

So the idea behind your scaling in method is you increase the risk as the trade progresses in your favour until you have a full position.
In the long run, the increase in brokerage on winning trades is compensated by reduced losses on losing trades.


I guess that is a reasonable way to put it - and technically (mathematically?) perhaps I am increasing risk. However, and this is perhaps where even T/A can get subjective, when a "strong trend" emerges, and is confirmed etc. then it takes a lot of negative energy (market sentiment) to turn the ship around (ignoring shocks like execs caught with their hands in the till or being jailed in China!!).

So does the mathematical increase in risk get off-set somewhat by an increasingly rosy market sentiment.

I honestly don't know, but worth thinking about?.

Colin - superb post - I need to study it in some detail.

I am here to learn, refine, get better at this "Trading" game, so I thank you for the spirit in the way that questions have been posed and your insightful "calibrations"

Will be out of action for a week or so, - apologies in advance if I am not responsive over that time frame.

Regards
Muzza


Top of pagePrevious messageNext messageBottom of page Link to this message
peterloh
Member
Username: peterloh

Post Number: 4655
Registered: 03-2003

Rating: N/A
Votes: 0


Tuesday, March 14, 2017 - 11:19 am:Copy highlighted text to 'New Message' boxEdit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Muzza, Colin and shadetreetrader,

In trading or investment, any information irrespective of what angle it comes from is a help with the decision making.
I am not a Weinstein's follower purist or technical analyst in that sense, however, I realized the contributions that these two have on my investments or as we put it long term trading.
For many years I have used a similar system like Muzza and has success. As of two years ago, I have changed from averaging to a lump sum at the beginning. In adopting this approach I have several considerations that I have to evaluate. Of great importance is the macro aspect of the industry to be invested in and the future potential. If I think there is shortage and there is potential, I am in. I won't invest in coal or any commodity where we can get easy access or out of favor. There must be a degree of certainty in the project being successful and also time is the essence. EG. RVR, zinc shortage and chances of it in production this year is a reality. Zinc price is going very high and zinc currently is in great demand. TAW, chances of it going into production by year end is a reality.
The SP MUST be near the breakout as close as possible when it is bought. In this case my cost is kept very low and I am less concern with a retracement or correction later on. The trick is to catch them early. I won't bother with averaging today.
If the SP goes up too quickly I may sell half, otherwise I will stay with the trend as long as I can.
Others could have used this approach before me, the risk is, if it doesn't work, the loss is greater. In mitigation, we are nearer to stage 1 establishment, thus lower risk. What do you think of this approach?


-------------------------------------------------
Disclaimer: Please note that comments made in this column is mainly for the interpretation of charts in technical analysis or comments and insights of both macro or micro issues and not intended to be taken as investment advice or a recommendation or solicitation to buy, sell or hold to any security or to adopt any investment strategy.Any share discuss is for general interest and should not be relied on to make an investment decision.It is likely that I may own the shares that we discussed as a trade or as an investment. All investments involve risks including possible loss of principal. Please consult your stock broker or financial adviser in regard to your personal situation.

The views expressed here contain information derived from public available sources that has not been independently verified.No representation or warranty is made as to the accuracy, completeness or reliability of the information.Any forward looking information in this representation has been prepared on the basis of a number of assumptions which may prove to be incorrect. It is not a complete analysis of every material fact regarding any region market, investment or strategy. Market and economic conditions do change, comments, opinions and analysis are only current as on the day it is written and may change without notice. It should not be relied upon as a recommendation or forecast by the writer.

Top of pagePrevious messageNext messageBottom of page Link to this message
colin_twiggs
Moderator
Username: colin_twiggs

Post Number: 2106
Registered: 06-2009

Rating: N/A
Votes: 0


Tuesday, March 14, 2017 - 02:36 pm:Copy highlighted text to 'New Message' boxEdit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Hi Peter,

It looks like you are trading more on fundamentals and have great confidence in the trade. If entries are based on technicals, then a more cautious approach may be required.

Regards,
Colin


My views expressed on this forum do not consider your personal circumstances and should not be considered as financial advice. Please conduct your own research.

Top of pagePrevious messageNext messageBottom of page Link to this message
peterloh
Member
Username: peterloh

Post Number: 4657
Registered: 03-2003

Rating: N/A
Votes: 0


Tuesday, March 14, 2017 - 03:34 pm:Copy highlighted text to 'New Message' boxEdit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



You are probably right Colin, however I believe using Weinstein's approach, does reduced my risk. Today, without visualizing the chart, I won't be investing in any shares.
Also knowing at what point I am investing in, gives me confidence to invest everything in one go.
The problem with investing at a late stage has a greater risk of losing more, even we claim that stop loss will reduce that, but how often that a stop loss has been triggered, the SP recovered almost immediately.
Weinstein's approach is to buy them low when it is ripe for a new trend.


-------------------------------------------------
Disclaimer: Please note that comments made in this column is mainly for the interpretation of charts in technical analysis or comments and insights of both macro or micro issues and not intended to be taken as investment advice or a recommendation or solicitation to buy, sell or hold to any security or to adopt any investment strategy.Any share discuss is for general interest and should not be relied on to make an investment decision.It is likely that I may own the shares that we discussed as a trade or as an investment. All investments involve risks including possible loss of principal. Please consult your stock broker or financial adviser in regard to your personal situation.

The views expressed here contain information derived from public available sources that has not been independently verified.No representation or warranty is made as to the accuracy, completeness or reliability of the information.Any forward looking information in this representation has been prepared on the basis of a number of assumptions which may prove to be incorrect. It is not a complete analysis of every material fact regarding any region market, investment or strategy. Market and economic conditions do change, comments, opinions and analysis are only current as on the day it is written and may change without notice. It should not be relied upon as a recommendation or forecast by the writer.

Top of pagePrevious messageNext messageBottom of page Link to this message
muzza
Member
Username: muzza

Post Number: 379
Registered: 06-2003

Rating: N/A
Votes: 0


Tuesday, March 14, 2017 - 04:18 pm:Copy highlighted text to 'New Message' boxEdit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



G'day Pete,
Thanks for sharing.

I do something similar -- thematic etc. when investing.
And FWIW as we discussed Lithium before - the positions I have built there in my investment portfolio are based on thematics and F/A.

And as you know I have also traded into GXY and PLS .. but using the trading rules.

What I love about IC is when people openly, honestly and with no "agro" share information so that we can all learn to be better at what we do.

Colin - what you have created here is something that you should be saluted for.
And I am still trying to dissect and reflect on your post with the hypothetical trades -- the other life has impinged on me at the moment.

Regards to all
Muzza


Top of pagePrevious messageNext messageBottom of page Link to this message
shadetreetrader
Member
Username: shadetreetrader

Post Number: 859
Registered: 02-2014

Rating: N/A
Votes: 0


Wednesday, March 15, 2017 - 08:19 pm:Copy highlighted text to 'New Message' boxEdit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Muzza has asked how others handle breakout trades, so I thought I'd do a paper trade & try out the scaling into a full position method at the same time.

The problem with trading breakouts is, what time frame do you use?
Do you use a 50 day breakout, a 100 day breakout, a 50 week breakout or what?
Well, GUD made the ultimate breakout today, it made a new all time high (ATH) and close, so that seems to be the most logical sort of breakout to me, & you can scan for something close to an ATH using the IC stock screener.

So using an end of day system (I like eod because you don't have to monitor the position intra day) I'll put on a 25% size trade tomorrow, & see if I can build up to a full position in the future.
Position size will be adjusted to suit a stop under the last daily swing low and maximum desired size.

This is a technical trade as I don't know anything about the fundamentals except that GUD went ex div on the 17th so there shouldn't be any dividend announcements for a while that might cause shock price movements, and the only relevant announcements recently have been change of interest notices, & they've been directors buying.

So we'll see how this test trade in real time goes, if it starts out a winner I'll add to it, & if it goes down straight away I'll sell a 25% position size.

Chart tomorrow, cheers stt.


My posts should not be taken as stock recommendations or advice.
If the band's playing a Waltz, don't do the Fandango.

Top of pagePrevious messageNext messageBottom of page Link to this message
shadetreetrader
Member
Username: shadetreetrader

Post Number: 860
Registered: 02-2014

Rating: N/A
Votes: 0


Thursday, March 16, 2017 - 07:16 pm:Copy highlighted text to 'New Message' boxEdit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



In at the open $11.30
25% of full position size.
S/L 10.48
Portfolio risk 0.25%
No position, paper trade only for a fun learning experience.
Thanks to Muzza for motivating me to try something new.

GUD entry 160317


My posts should not be taken as stock recommendations or advice.
If the band's playing a Waltz, don't do the Fandango.

Top of pagePrevious messageNext messageBottom of page Link to this message
colin_twiggs
Moderator
Username: colin_twiggs

Post Number: 2107
Registered: 06-2009

Rating: N/A
Votes: 0


Friday, March 17, 2017 - 09:45 am:Copy highlighted text to 'New Message' boxEdit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Shadetree,

Resistance at $11.00
Good entry (25%) on 2nd day follow-through after initial breakout. Stop at $10.50.
Three questions:
  • What time frame do you expect to hold: days, months or years?
  • When do you plan to make next entry?
  • When do you plan to move the stop?



My views expressed on this forum do not consider your personal circumstances and should not be considered as financial advice. Please conduct your own research.

Top of pagePrevious messageNext messageBottom of page Link to this message
fibonacci
Member
Username: fibonacci

Post Number: 233
Registered: 10-2003

Rating: N/A
Votes: 0


Friday, March 17, 2017 - 02:57 pm:Copy highlighted text to 'New Message' boxEdit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Hi all,
Been following this with interest.

I've often had difficulty with this type of entry because it seems to me that trailing stops give too much back i.e. usually stopped once I've loaded up with [ in this case ] four by 1/4 lots. In tandem with this would one have to trail stops closer and closer therefore reducing "wriggle room" and greatly increasing the risk of being stopped out far too early in the trend? Obviously if one is wrong straight off the bat then the loss is 100% of the position instead of 25% but could someone please address my concern above - and an optimal way of managing it?

Thus it seems to me that if one has a signal it's more risky to wait longer and longer for the trade to progress - especially if we have breakout then a retracement to give a, higher probability entry.


John

YOU've got to
know when to hold 'em
know when to fold 'em.

Top of pagePrevious messageNext messageBottom of page Link to this message
shadetreetrader
Member
Username: shadetreetrader

Post Number: 861
Registered: 02-2014

Rating: N/A
Votes: 0


Friday, March 17, 2017 - 04:15 pm:Copy highlighted text to 'New Message' boxEdit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Colin,

I'm playing this by ear, so all I can say at this stage is, I expect to hold anywhere between 2 days and 2 years, but I would like to hold for as long as I get a good capital gain plus dividends.

As for next entry & stop move, I think the two go together.
It doesn't make sense to add positions without moving the stop up.
You would be better off to buy 100% initial position, because you would buy the stock cheaper and with less brokerage.

The answer to your 2nd & 3rd questions will depend on what the stock does relative to the initial entry price and initial stop, I don't have the rules sorted out yet, I'm probably going to learn by my mistakes!

Any suggestions from experienced scaler inners and outers are welcome.


My posts should not be taken as stock recommendations or advice.
If the band's playing a Waltz, don't do the Fandango.

Top of pagePrevious messageNext messageBottom of page Link to this message
shadetreetrader
Member
Username: shadetreetrader

Post Number: 866
Registered: 02-2014

Rating: N/A
Votes: 0


Sunday, March 19, 2017 - 08:26 am:Copy highlighted text to 'New Message' boxEdit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Fibonacci,
Glad I'm not the only one trying to figure this out!
The concept of entries which result in losing less when we're wrong and winning more when we're right is great, however the application
is going to involve careful timing, sizing, and risk, - not so easy!

Next week is going to be the busiest of the year for me, it's nets off, machine harvesting/ hand picking Cab Sav, Sauvignon & Pinot!
I'll be working long days then some 3am starts so I may not have much time to manage this trade or post much next week.
If this is the case then I'll simply switch to the weekly time frame, leave the stoploss at $10.48 & have a look at it next weekend.

If any other forum members would like to try their hand at managing the trade in the daily time frame based on the entry I posted above, then that would be very interesting, my only request is that you make it clear if you're managing the trade intraday, end of day, or end of week and post accordingly, no hindsight trades, lets keep it real.

(Message edited by shadetreetrader on March 19, 2017)


My posts should not be taken as stock recommendations or advice.
If the band's playing a Waltz, don't do the Fandango.

Top of pagePrevious messageNext messageBottom of page Link to this message
colin_twiggs
Moderator
Username: colin_twiggs

Post Number: 2108
Registered: 06-2009

Rating: N/A
Votes: 0


Sunday, March 19, 2017 - 02:22 pm:Copy highlighted text to 'New Message' boxEdit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Shadetree,


quote:

It doesn't make sense to add positions without moving the stop up. You would be better off to buy 100% initial position, because you would buy the stock cheaper and with less brokerage.




I know the norm with pyramiding is to take your full position then later increase your position when you can move the stop up to cover your initial exposure.

What we are doing is slightly different, scaling into the full position and never exceeding that. The only justification for this -- as you pointed out you can buy the stock cheaper at the first entry -- is if your confidence in the trade increases over time.

Breakouts have a high failure rate, so confidence may initially be modest, but success rates improve if you have a secondary correction that respects support at the initial breakout level. That justifies an increase to say 50%. Breakout above the previous peak may again improve confidence and justify an increase to 75%. Then we wait for another pull-back to respect support before increasing to 100%.

Movement of stops need not take place with each entry. I prefer to adjust stops only when retracement respects a new support level (i.e. at trades #2 and #4).

To avoid the tendency to micro-manage, I prefer working with weekly charts. You need a decent correction to increase confidence in the support level, not just a 2/3 day pull-back. You may sometimes miss out if there is no correction and the stock just takes off vertically. But you have accept that.


My views expressed on this forum do not consider your personal circumstances and should not be considered as financial advice. Please conduct your own research.

Top of pagePrevious messageNext messageBottom of page Link to this message
shadetreetrader
Member
Username: shadetreetrader

Post Number: 867
Registered: 02-2014

Rating: N/A
Votes: 0


Tuesday, March 21, 2017 - 05:52 am:Copy highlighted text to 'New Message' boxEdit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Colin,

Well that simplifies things, I just have to ask the question, 'do I feel more confident in this trade.'

That makes for a simple flow chart, and the answer is no, so far.


My posts should not be taken as stock recommendations or advice.
If the band's playing a Waltz, don't do the Fandango.

Top of pagePrevious messageNext messageBottom of page Link to this message
shadetreetrader
Member
Username: shadetreetrader

Post Number: 868
Registered: 02-2014

Rating: N/A
Votes: 0


Tuesday, March 21, 2017 - 05:31 pm:Copy highlighted text to 'New Message' boxEdit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Well GUD did produce a daily reversal bar today, which could be a precursor to a new higher more glorious trend, but it's at the top of an established daily & weekly trend channel so I ain't doubling up yet.
It's gotta be a bit more convincing than that.
Goodnight, 2am start tomorrow!


My posts should not be taken as stock recommendations or advice.
If the band's playing a Waltz, don't do the Fandango.

Top of pagePrevious messageNext messageBottom of page Link to this message
shadetreetrader
Member
Username: shadetreetrader

Post Number: 869
Registered: 02-2014

Rating: N/A
Votes: 0


Saturday, March 25, 2017 - 09:05 am:Copy highlighted text to 'New Message' boxEdit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



GUD just went sideways this week bouncing off the previous high of 11.14 which is a good sign but I didn't get the "I feel more confident in this trade" signal.
Consequently I haven't added to the position - colour me hard to please
If it makes a new high I'll look at adding the next 25%

GUD 250317


My posts should not be taken as stock recommendations or advice.
If the band's playing a Waltz, don't do the Fandango.

Top of pagePrevious messageNext messageBottom of page Link to this message
shadetreetrader
Member
Username: shadetreetrader

Post Number: 875
Registered: 02-2014

Rating: N/A
Votes: 0


Tuesday, March 28, 2017 - 06:44 pm:Copy highlighted text to 'New Message' boxEdit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Nice rise today with volume, I'll add another quarter of the full position at the open tomorrow, providing the US market doesn't fall off a cliff overnight.


My posts should not be taken as stock recommendations or advice.
If the band's playing a Waltz, don't do the Fandango.

Top of pagePrevious messageNext messageBottom of page Link to this message
shadetreetrader
Member
Username: shadetreetrader

Post Number: 876
Registered: 02-2014

Rating: N/A
Votes: 0


Wednesday, March 29, 2017 - 06:45 pm:Copy highlighted text to 'New Message' boxEdit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



'Bought' GUD at the open for a total of 50% of desired position despite the market negativity from the mostly sky is going to fall regurgitator.
This is a real-time but paper trade for me to learn and try out an entry system that I had previously dismissed.

gud 290317


My posts should not be taken as stock recommendations or advice.
If the band's playing a Waltz, don't do the Fandango.

Top of pagePrevious messageNext messageBottom of page Link to this message
colin_twiggs
Moderator
Username: colin_twiggs

Post Number: 2116
Registered: 06-2009

Rating: N/A
Votes: 0


Thursday, March 30, 2017 - 12:59 pm:Copy highlighted text to 'New Message' boxEdit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Go Shadetree,
We're all cheering for you.
Is your stop still at $10.50?
(I would prefer a few cents below at say $10.40)


My views expressed on this forum do not consider your personal circumstances and should not be considered as financial advice. Please conduct your own research.

Top of pagePrevious messageNext messageBottom of page Link to this message
shadetreetrader
Member
Username: shadetreetrader

Post Number: 877
Registered: 02-2014

Rating: N/A
Votes: 0


Thursday, March 30, 2017 - 01:47 pm:Copy highlighted text to 'New Message' boxEdit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Thanks Colin, although I think you may be exaggerating the numbers by one or two

Yes the stop's still at 10.48 as originally posted, it goes against the grain but this is a learning experience!
I'd be interested to know your reasons for a 10.40 stop.

(Message edited by shadetreetrader on March 30, 2017)


My posts should not be taken as stock recommendations or advice.
If the band's playing a Waltz, don't do the Fandango.

Top of pagePrevious messageNext messageBottom of page Link to this message
colin_twiggs
Moderator
Username: colin_twiggs

Post Number: 2117
Registered: 06-2009

Rating: N/A
Votes: 0


Thursday, March 30, 2017 - 01:54 pm:Copy highlighted text to 'New Message' boxEdit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)




quote:

I'd be interested to know your reasons for a 10.40 stop.




It's the same as for 10.48 (below support at 10.50). Just a wider margin for overshoot.


My views expressed on this forum do not consider your personal circumstances and should not be considered as financial advice. Please conduct your own research.

Top of pagePrevious messageNext messageBottom of page Link to this message
shadetreetrader
Member
Username: shadetreetrader

Post Number: 907
Registered: 02-2014

Rating: N/A
Votes: 0


Sunday, April 30, 2017 - 08:05 am:Copy highlighted text to 'New Message' boxEdit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Thought I'd update this GUD multiple entry experiment and should point out that I don't normally use this method.

As I want to hold this stock for as long as possible, I've switched to the Weekly time frame.
I've drawn in a lower trend line and a top channel line around the central linear regression line.
The stock has now moved out of the buy zone & into the sell zone.
I won't be adding to the 50% position unless the stock gets back into the buy zone.
I'm sliding the stop up the trend line & it's now at $10.59

GUD 300417

(Message edited by shadetreetrader on April 30, 2017)


My posts should not be taken as stock recommendations or advice.
If the band's playing a Waltz, don't do the Fandango.

Top of pagePrevious messageNext messageBottom of page Link to this message
shadetreetrader
Member
Username: shadetreetrader

Post Number: 915
Registered: 02-2014

Rating: N/A
Votes: 0


Sunday, May 07, 2017 - 07:56 am:Copy highlighted text to 'New Message' boxEdit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Moved stop up the trendline to 10.69


My posts should not be taken as stock recommendations or advice.
If the band's playing a Waltz, don't do the Fandango.

Top of pagePrevious messageNext messageBottom of page Link to this message
muzza
Member
Username: muzza

Post Number: 380
Registered: 06-2003

Rating: N/A
Votes: 0


Sunday, May 07, 2017 - 10:56 am:Copy highlighted text to 'New Message' boxEdit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Hi Guys

For lots of reasons I have not been able to post for sometime, so thanks to Shady for keeping this thread alive and updating on GUD.

My view for what its worth is that XAO/XJO are testing resistance levels at 59xx ... and we need to see these levels surpassed with volume to have confidence that the bulls will continue to run.

There could well be a period of consolidation / correction downwards, so against that backdrop tightening stops is prudent.

Like shady I have tightened the stop on the NAB trade and am in the process of reassessing the $40 target by Aug/Sept that I set myself.

NAB Weekly:-

NAB3

Have run the stop up to the 26 period EMA

The next few weeks (net of being stopped out) will help me decide on whether to stay in or exit.

Best wishes all


Top of pagePrevious messageNext messageBottom of page Link to this message
fibonacci
Member
Username: fibonacci

Post Number: 234
Registered: 10-2003

Rating: N/A
Votes: 0


Sunday, May 07, 2017 - 03:00 pm:Copy highlighted text to 'New Message' boxEdit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Hi muzza,

You have drawn another issue into this discussion by mentioning that some amount of resistance could be [normally] expected about this price level.

That is, how to treat stops at such a level. It would be unsurprising if the XJO continues to struggle at 5900 to 6000 and NAB has experienced a long history of trading in the current range to $36.

So, as you indicate the natural response is to tighten stops - it seems you have halved the proximity of your stop. But my quandary is this and I don't see this issue being addressed anywhere by anyone.. if a trade reaches a zone of expected resistance then if that resistance does indeed eventuate, then, by tightening stops you are just guaranteeing a stop-out. On some occasions prices just sail through resistance but how often does that occur? Is that worth risking money on?

So what are your options? Widening stops at resistance if your edge suggests it will eventually break through or just taking profits at current levels are the only options I can see. I favour taking profits - pre-set Take Profit - probably set sometime after trade entry. I certainly don't see that almost guaranteeing a stop-out at a lower than current level is a deferential way of treating your hard-earned.

Any thoughts from anyone?


John

YOU've got to
know when to hold 'em
know when to fold 'em.

Top of pagePrevious messageNext messageBottom of page Link to this message
shadetreetrader
Member
Username: shadetreetrader

Post Number: 918
Registered: 02-2014

Rating: N/A
Votes: 0


Sunday, May 07, 2017 - 04:20 pm:Copy highlighted text to 'New Message' boxEdit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Fibonacci seeing as you said anyone, my 2c just until Muzza replies..

The stop is now under the last swing low, if stopped out all buys will be sold at a profit, barring a market meltdown, can always re-enter.

But if NAB continues on up from here then the stop can be raised as per usual.

Win win?

Muzzas NAB
Apologies if the entries are not exactly correct.


My posts should not be taken as stock recommendations or advice.
If the band's playing a Waltz, don't do the Fandango.

Top of pagePrevious messageNext messageBottom of page Link to this message
muzza
Member
Username: muzza

Post Number: 381
Registered: 06-2003

Rating: N/A
Votes: 0


Monday, May 08, 2017 - 03:40 pm:Copy highlighted text to 'New Message' boxEdit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Hi Guys,

I will try to do Fibbo's question justice, but I am not sure that I can.

First I don't have all the answers (so no one should accidentally interpret this thread as a lecture from me!)- I come here to learn & share ideas that rightly all should be tested & debated by the IC community.

Second, I indicated somewhere back in the thread, I am not in a totally mechanical trading system and particularly when it comes to stops I use some discretion.

The question posed and the quandary are very valid, "by tightening stops you are just guaranteeing a stop-out" is a great way to put it to focus the mind.

I am not sure that one guarantees a stop-out, but of course the probability is higher. Not trying to split hairs, but the difference is material in terms of the ongoing evaluation of the potential Risk:Reward ratio of the open trade.

If I thought the stop was going to get hit then I wouldn't bother and just close the trade.

To my mind, and this is where I applied some discretion (right or wrong time will tell) - there are several things that went into my decision to tighten the stop for this trade

1. I noted that XAO/XJO were running into resistance - not NAB specifically
2. For sometime I have becoming nervous of various things going on that have nothing to do with TA per se. The sabre rattling by US/Nth Korea ... what happens if that get uglier? The RBA pressuring the finance sector on capital reserves & capital ratios -- see Colin's comments re housing bubble in his Trading Diary - some re-rating (de-rating?) of the finance sector is a real possibility. God preserve us if the housing bubble bursts as against a more gentle deflation!
3. (1) and (2) combined got me thinking that rather than the market churning it may indeed correct (dramatically).
4. For several personal reasons I cannot screen-hug my trades for the next couple of months - so having to take manual intervention decisions with stop loss levels is more risky at this time for me.

So I erred on the side of caution.

My HOPE is that the market reads this post and the bulls run hard proving me to be wrong again! (NAB is up as I write this as are XAO/XJO).

If, hypothetically, XAO/XJO was running into resistance, but the other two factors were non-existent, then I would not have touched the stop.

This may not be as precise an answer to your question regarding stop positioning dilemma as you wanted - but this is how I arrived at my decision (this time).

And as Shady pointed out the stop is still below the last swing low, so some room for the trade to breathe.

Hope this helps in some way.

It would be good to know from the IC community how many of our trades are closed by S/L hits as against an actual decision to close the trade for other reasons - Profit Target reached, Price Action churning too long, etc etc.

cheers
Muzza


Top of pagePrevious messageNext messageBottom of page Link to this message
fibonacci
Member
Username: fibonacci

Post Number: 235
Registered: 10-2003

Rating: N/A
Votes: 0


Monday, May 08, 2017 - 09:34 pm:Copy highlighted text to 'New Message' boxEdit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Thanks muzza,

My "IF" was missed.

"IF" indeed the expected resistance does eventuate then a tighter stop is more likely to be hit - obvious - but I do agree, not a 100% probability.

"IF" you believe your strategy indicates the probable continuation of the trend then why tighten stops? Surely surviving the increased volatility is then the aim. Even widen stops? Nothing, in trading, is worse than being taken out by a spike low only to then notice a big rebound in the expected direction. Made worse by the fact that you assigned a greater than normal probability to that event in the beginning.

Your example, I agree, still leaves some"wiggle room" but am I the only one who thinks it's still bad timing to halve "wiggle room?" Is that the action of someone who actually expects a reversal, not a pause?

An aside - not entirely in tune with this discussion but with some relevance......

I trade with 0.5% of my account as Risk per trade so at these times I'm prepared to remove stops but rigidly re-assess at each End of Day price because I don't like being stopped out by the expected.







John

YOU've got to
know when to hold 'em
know when to fold 'em.

Top of pagePrevious messageNext messageBottom of page Link to this message
muzza
Member
Username: muzza

Post Number: 382
Registered: 06-2003

Rating: N/A
Votes: 0


Tuesday, May 09, 2017 - 08:13 am:Copy highlighted text to 'New Message' boxEdit Post Delete Post Print Post    View Post/Check IP (Moderator/Admin only) Ban Poster IP (Moderator/Admin only) Move Post (Moderator/Admin Only)



Mate - sorry I missed the IF .. I miss a lot of things these days!

Good or bad idea re halving "Wiggle Room" is a personal perspective I believe, only time will tell. If only we could retrospectively trade this would be easy!!

My view was/is as per articulated above - I think there is significant market risk emerging and in the finance sector.

Its fine for anyone to have an alternative view, and in that event (if I was one of those) I would not have touched the stop

cheers
Muzza

Add Your Message Here
Post:
Bold text Italics Underline Create a hyperlink Insert a clipart image

Username: Posting Information:
This is a private posting area. Only registered users and moderators may post messages here.
Password:
Options: Enable HTML code in message
Automatically activate URLs in message
Action:

 
Other Threads  
Last PosterPostsPagesLast Post
I.C. Mobile App... an incredible oportunity presents...colin_twiggs02-May-17  11:50 am
Timeframe For Intraday Tradingqed07-Jun-16  10:57 pm
Weinstein Revisitedhailoh33 31-Jan-16  06:00 pm
I am no longer afraiddved15-Aug-15  03:35 am
Market Filter/Switchshadetreetrader15 03-Jan-15  02:10 pm
Redline Trading Systemcolin_twiggs02-Mar-13  02:37 pm
DMI billcu13-Feb-13  03:55 pm
Low Volatility Up-Trendfibonacci13 22-Jan-13  04:03 pm
Meansbillcu21-Jan-13  06:43 am
Risk Management: The 2% (or 1%) Rulesway50 20-Jan-13  06:21 pm
The Trend is the Holy Grail ?msparks15 16-Jan-13  09:44 pm
Trading Breakoutsmsparks12 16-Jan-13  08:57 pm
"Traders International" Is anyone on here using this system?colin_twiggs39 02-May-12  03:57 pm
Twiggs Moneyespresso12 25-Apr-12  03:02 pm

Threads by Last Post Time:

First Previous 0 1 2 3 4 Next Last

Administration Administration   Log Out Log Out    

««  Previous  Next  »»