einok
msg #83981
- Ignore einok |
12/7/2009 10:42:55 PM
I bit the bullet and ordered the Short Term Trading Strategies That Work from the TradingMarkets website (couldn't find it used)
I have a question for you all, especially Bartune1 since he seems to utilize this system daily.
In these situations, what would you do? Or, if you have experienced them already, what did you do?
1: You enter a long trade on a pullback with RSI2 below 5, and above the 200 day MA. If during the trade, the price closes below the 200 day MA, would you consider the trade invalidated, since it no longer has the 200 day MA bias?
2: What would you do if a stock gapped significantly (subjective I know) against your position?
Thanks
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BarTune1
441 posts
msg #83982
- Ignore BarTune1 |
12/7/2009 11:11:56 PM
I use the cross of the 5 dma, end of day, as an exit and use it 99% of the time - even when stocks have gapped against me or crossed the 200 dma, which is rare. I will exit intraday where a stock significantly crosses the 5 dma intraday, and I have access to the internet.
I normally wouldn't enter a trade merely because the RSI 2 was below 5. I usually restrict picks to where it is below 2 or above 98 before I would enter. There are plenty of high volume stocks that will qualify even under that criteria. You might have to wait a few days here and there, but you are better off waiting for the set up you want.
Even though there are stocks that meet that criteria now, I am not really interested in taking any significant positions right now because the VIX divergence indicator is neutral. And, I really only want to enter short trades when the market as a whole is overbought, or long trades when the market as a whole is oversold.
I usually target low RSI2 stocks the night before, and then only enter them on an intraday pullback of at least 3%, another of Connors rules. By that time, the stocks are way oversold.
I dont trade daily per se. I still wait for setups that I like. The only trade I made today was to short FSLR after it was up significantly. It had/has a RSI2 of around 99 when I shorted and was up intraday close to 5%. Its way above its upper BB level and also trading below its 200 dma.
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miketranz
961 posts
msg #83983
- Ignore miketranz |
12/7/2009 11:12:41 PM
In any trade situation,if a position goes against you,get out,get an education.The odds are against you once a trade drops below the price you paid for it.The number one reason people lose big money trading is they don't know how to take a loss.They're not emotionally prepared for what the market will dish out,in a game that's set up to steal money from the public.A game in which all logic is thrown out the window....
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einok
msg #83984
- Ignore einok
modified |
12/7/2009 11:19:29 PM
BarTune1
What is your 2nd exit to take profits, above 70 for long and below 30 for short?
I really appreciate all of your help with this.
Also, what is the VIX divergence indicator you metion? Is that something I will learn about in the book I bought?
BTW, did you see where AAPL is sitting now?
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BarTune1
441 posts
msg #83985
- Ignore BarTune1 |
12/7/2009 11:32:03 PM
Yep, AAPL is one of 4 stocks showing on one of my buy filters. I'm not committing much to this market right now though ....
I don't have a second exit ... I use the one that I mentioned and stick to it.
As another smart trader once said on this forum "The hardest thing to do is exit." I agree. Whatever exit you choose, you are likely better of sticking to that system whether it involves stops or breaches of other technical measures (like the RSI or dma).
I have had success not using stops. Many would disagree with such an approach. I can only speak for myself. So whatever works for you works - and you'll end up having to figure that out on your own.
Exits are worthy of a discussion all on their own and are integral to systematic and profitable trading.
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einok
msg #83987
- Ignore einok |
12/7/2009 11:37:48 PM
Bartune1,
I was curious, what do you mean by VIX divergence filter? I saw the posting "VIX variance vs. 10 day moving average". What is it that you use, settings, timeframe, etc.
Thanks
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