Entering On Buy-Stops/Sell-Stops

[Dogpile]

curious if many of you use buy and sell-stop entries as an entry technique a significant amount of the time?

one nice aspect to it is that you may not be triggered into a few bad (losing) trades because price won't move into your stop order. another nice aspect is that you will always have a good idea for a stop-loss level if the buy/sell stop triggers you in -- ie, you can always use the a recent bar high/low that just occured prior to the momentum that triggered you into your position as a stop.

[brownsfan019]

Dog - it's pretty much the ONLY way I enter on an intraday basis.

Reasons:

1) Guaranteed to filter out some losing trades (esp how I enter with candlesticks).

2) Guaranteed to get into every winning trade.

As soon as I realized that, the decision was easy on how to enter. Of course, your system must accommodate buying above or selling below the current price.

[BlowFish]

Only for break out brackets. And only use BO's at very specific times (pre fed for example)

[momentom]

I use stop limits with a limit on the limit as I can get some horendous fills otherwise on the DAX.

[BlowFish]

	Quote:	brownsfan019
	Dog - it's pretty much the ONLY way I enter on an intraday basis. Reasons: 1) Guaranteed to filter out some losing trades (esp how I enter with candlesticks). 2) Guaranteed to get into every winning trade. As soon as I realized that, the decision was easy on how to enter. Of course, your system must accommodate buying above or selling below the current price.

So you stop into the BO of the bar you get a signal on for example? Nice thing with this sort of entry is momentum often takes you away from your entry pretty quick. Downside is I guess your stops are a little further away.

[brownsfan019]

	Quote:	BlowFish
	So you stop into the BO of the bar you get a signal on for example? Nice thing with this sort of entry is momentum often takes you away from your entry pretty quick. Downside is I guess your stops are a little further away.

EXACTLY.

You get filled WITH the momentum vs. AGAINST it. Downside is stops are larger.

I view it like this - with a regular resting limit order you are asking price to go against you and then snap back and go with you. Example - say you want to buy the ES at 1500 and price is at 1503. You want to go long, but price must go DOWN for you to go LONG. Not only does it need to go down, on the ES, it must go past your price level to ensure a fill. So price needs to travel to 1499.75 in our example for you to get long.

Just seems counter-intuitive to me. Price must go against you in order to take on a position. That's hard for me to want to trade like that.

[torero]

I use buy/sell stop for entries all the time for breakout plays. It's one of the best method in getting into the trend without missing it and not getting into a trade where there is no momentum. Sometimes you sacrifice a few ticks because of the burst of volume but the reward more than make up for it. The buy/sell stop above or below the last bar after a retracement is the sweetest spot to get in.

[Dogpile]

I love the buy/sell stop for entry but many traders I talk to don't seem to use it much.

You occassionally join in on a big buy/sell program trade -- catching it early on and when it carries, you have a 'zero-pain' trade on your hands.

But it also helps discipline you as you have a natural stop loss point that is created when you trigger into the position.

[MrPaul]

	Quote:	Dogpile
	curious if many of you use buy and sell-stop entries as an entry technique a significant amount of the time? one nice aspect to it is that you may not be triggered into a few bad (losing) trades because price won't move into your stop order. another nice aspect is that you will always have a good idea for a stop-loss level if the buy/sell stop triggers you in -- ie, you can always use the a recent bar high/low that just occured prior to the momentum that triggered you into your position as a stop.

That is the only way I enter and exit a position. Brownsfan was spot on when he mention how you are trading with the momentum when using a buy/sell stop.

[OAC]

If I have a resting buy/sell stop order and the NYSE tick reading becomes extreme(>1000 and <-1000) as the market get very close to my stop level, I usually cancel my stop order and try to enter on a pullback at least in NYSE tick reading if not in price.