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Strategies & Market Trends : Stock Attack II - A Complete Analysis -- Ignore unavailable to you. Want to Upgrade?

To: rocklobster who wrote (27722)	1/15/2002 6:12:12 PM
From: Michael Watkins	Read Replies (1) \| Respond to of 52237

I went short about two minutes before getting stopped out..I expected a push to the high and a failure..the previous high was 24.5 so I shorted at 23 because I wanted to be short and didnt know if it would make it over the high. Mistake 1, you shorted before the failure. Why not wait until the failure occurs? That way if it doesn't fail, you are sitting by, in no pain at all. Simply wait for the up bars to finish forming and lurk below with a Sell Stop LIMIT. That's precisely what I do. I placed my stop at 26.5 in case the high got taken out with gusto.. Now I might have done something a little similar, except the difference is I would not be in the move until it already tested and failed. I would have very tight stops. Example: trendvue.com Price tested at the cursor. I'd have a Sell Stop Limit 1 point under that bar. I might have been filled the next 1M bar, if so would have placed a buy stop to cover just above the bar that took me into the trade. Ideally I'm looking for it to fail right away. In fact if it doesn't, I will bail quickly. There is always another day or another trade. So it seems as if we are doing the same thing, but we are not. I am not even short until price has proven that it is weak. You went short when it was proving it could still go up (more buyers than sellers). Now You can't tell me that this was a reasonable move based on just "more buyers than sellers" the farking index spiked sixty points for gods sake... well at least the nq contract did..!!!!!!!!...the index itself never even went up at all.. Yes, I can indeed tell you that. There is no magic god that enforces price on the NQ. Its driven by buyers and sellers. there should be some kind of breakers that stop the nq from trading that far out of whack with the actual index. Why? It is a "futures" market after all. There is already a disconnection between real price and the futures market. Edit: here is information on the circuit breakers: cme.com You'll note that they only provide downward protection during the day. Sad but true. And note that the limits are not based on the cash index at all. how the hell do you protect from 40 points of slippage on a stop.. you can't tell me this is my fault somehow and that it is reasonable to expect this kind of thing to happen.. For one thing, be extraordinarily careful near major tests of swing highs or lows, and also the daily high and low. Be also aware that after the first hour, liquidity heads south until near the end of the day. I'm not saying its illiquid, but less liquid. For another, don't go short ahead of failure. You trade futures, one advantage is that you can short at will on a downtick. So don't be going short while its still moving up! Makes no sense! what the hell are stops for anyway... Again, with a non limited Stop, all you are telling the market is that you want out. At any price. Its not fair, it feels wrong, but the market did what it is supposed to do, match buyers with sellers. Enough from me on this subject. I feel for your loss but its up to you to make sure that you don't put yourself in a position where the odds of it happening are high...