bikhod
5 posts
msg #102501
- Ignore bikhod |
8/29/2011 2:49:08 PM
Hi
Does anyone have a filter/strategy for detecting when an instrument goes parabolic or is making a climax top.
For example, one my positions (FXF - Swiss France) went parabolic recently while I was on vacation and then suffered a major correction. I would like to create a filter to warn me of such moves.
Thanks in advance!
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straken
469 posts
msg #102505
- Ignore straken |
8/29/2011 10:57:39 PM
Filter no.. Strategy yes. A parabola has two sides. The quicker an instrument moves up, it can correct just as fast. When fxf day range was 4 times its average which was a 52 week high day range for it, I would have entered a trailing stop loss to secure profits. Some times TSLs may cost you if your not monitoring your positions daily, but they can also save you some real pain.
I believe this may have been your best strategy especially if you planned to be away from monitoring your positions. Many will claim they get stopped out out the worst possible times but if you cant monitor your positions frequently its your best solution.
Jack
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duke56468
683 posts
msg #102512
- Ignore duke56468 |
8/30/2011 10:02:30 AM
If you can't monitor your stock with a mental stop then a trailing stop set to break even or better will at least keep you from getting ripped off when your not looking.
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bikhod
5 posts
msg #102515
- Ignore bikhod |
8/31/2011 3:04:51 AM
Thanks for the replies.
I have never managed to come up with a good trailing stop strategy. Can anyone help in this area please?
Please note that I am not a short term trader: I hold my trend following positions for months and I use weekly and monthly charts only as during the week I have no time, and energy, to look at charts etc.
In case it helps, my entry signal is 52 week high, RSI 28 week > 50, ROE > 20%, and increasing relative strength.
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four
5,087 posts
msg #102517
- Ignore four |
8/31/2011 10:42:39 AM
bikhod,
Please post actual filter.
Thanks
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duke56468
683 posts
msg #102523
- Ignore duke56468 |
8/31/2011 2:46:21 PM
No one can tell you what a good stop is, it depends on your risk tolerance. I am uncomfortable losing more than 5% so I set my stop there. If the stock moves up 5% I move the stop to B/E and sometimes trail at that %, and change it with my comfort level. Some people set the stop at 2x the atr or some fraction of it. I prefer mental stops if I'm around the computer primarilly because of gaps especially morning gaps, if the stock gaps far below your stop it will sell at market which may be far below your stop. You could use a stop-limit order, but if it gaps down and keeps going your out of luck again.
I think we should all clamor for markets and brokerages to be open 24/7, then the MM's could not pick our pockets running the stops with the gaps. JMHO
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