Long Stock Entry Order
January 29, 2016
Coach Matt takes a look at entering a swing trade for Long Stock on SO.
Entry Order: Buy Stop Limit
Stop Loss: Sell Stop
Target: Sell Limit
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SUPERRRRRRRR! Thanks!
Matt,
Thank you for the video!
Does the Buy Stop Limit set the range of what you are willing to pay for the stock? Does the stop loss only kick in if the Buy Stop Limit triggered and the stock did NOT hit the Target? Lastly, the Target is where you are taking profit, correct?
TJWD
Just covered this in Master. Thanks for the great recap, Matt. Helps reinforce the learning.
This methodical presentation provides a much needed foundation for integrating basic theory into the challenging mechanics of the TOS platform. Thank you.
Hi Matt, I have 3 questions i would like to clarify.
1. I get that you wanted to find out what is %10 of the ATR (which ended up being 8 cents), but i am not sure what did you add it to in order to determine the Buy Stop Price?
In the video you said will place the Buy Stop Limit order “8 cents above the high”, this confused me.
What high are you referring to? By high do you mean the high of the previous day’s trade? Or maybe are you referring to the previous cycle high which is at the chart’s previous peak? Please clarify this, thanks.
2. I am a bit unclear about chart time scales. In the video your chart showed a time range of about 3-4 months and so your cycle lengths were about one month long and both had 4.5 PAY.
HOWEVER if you were to zoom in your chart to span a scale of 2 weeks for example then you would probably observe different cycle ranges and PAY.
My question therefore is how do we determine the time range to use? Different time scales (3 months vs 2 weeks for example) will yield completely different PAYs and so i am not sure what is the standard practice here.
3. In general, if instead of placing a fixed Sell Stop Market at 48.42 (support of 48.80 – 0.38 gave us 48.42) you would place a trailing sell stop which I think should be the dollar difference is between the market price and the 48.42 price, then you are guaranteed to perform better correct? (because that means you will exit the trade at or above 48.42 since as soon as your stock price goes up then your trailing sell stop will rise as well).
Lastly, i think you guys should really try to fix the video quality so the user can see the chart numbers in the video as well as the thinkorswim letter and number values, they are currently too blurry to properly see.
Hi Amit,
When using the ATR %, you will add it to your trigger price. The high point or trigger point can be the previous day, the current day, the previous cycle or an intraday point that the trader identifies. It can change from trade to trade based on the discretion of the trader.
Most new traders should stick to daily candlesticks, and about 6 months to 1 year of time to determine swing trades. This is the scale that is most commonly used.
Are you watching the video in 1080p for the quality? If you are watching it in a lower setting, you may need to manually click the gear on the bottom right of the video and adjust it for your system. When I watch the video, it is clear, so if it’s blurry on your side, it may be this setting.
Great questions, thanks for being a part of Tackle Trading.
Tim
changing the quality to 1080p did the trick, thank you!