[http://chribstrades.blogspot.com]
"While newcomers and the financial media focus on entry prices for stocks, seasoned market participants recognize that the exit is by far the more important of the two. The exit is what allows us to achieve the most important goal of a good trading system: to preserve capital."
"In uptrending markets, the trade optimization strategy is simple: use the definition of a uptrend (that is, higher highs and higher lows) to move sell-stops up as the lows get higher and higher...not aiming to get out at the tippy-top. Rather, the aim is to get out at the low that is closest to the top once the trend finally does end and the stock begins to decline."
"We let the market lead us, rather than trying to lead the market."
"Because most of technical analysis is based on prices trending, systems that employ technical concepts start to malfunction when there is not much of a trend...markets are trendless about a third of the time."
"If the breakout occurs below the stock's 50 or 200-day moving average, I often set a target exit for up to 100% of the position near that moving average."
"My trading strategy is based on buying breakouts, and I will happily buy them any time of day, except at the open. Breakouts at the open have a higher chance of failure for a number of reasons. At market open, trading desks are processing all the orders that people placed the night before and before they went to work. Volume may be high, but unlike at other times of day, this volume may not be representative of ongoing buying interest—more like a one-time charge. The market hasn't had a chance to get into a rhythm, so in a sense, the action at the open is out of context. One simply doesn't have any assurance whether there will be follow-on buying interest, or if instead the breakout will fail. Indeed, one strategy that traders use is to fade (meaning sell) the opening breakout, especially if it's on a gap up...waiting until 10:15 before entering orders."
"While there is money to be made, primarily by playing breakouts, the danger element means a high chance you'll just lose your money."
"Optimizing the trade means balancing two goals: maximizing profit potential and minimizing risk."
Mark Kingdon:
"It's important not to confuse investment genius with a bull market"
"I realized I was not in the high-performance-at-any-cost business," he reflects. "I was instead in the consistent-performance business, providing above-average returns with below-average risk. "
"I was taken with the idea that you could buy something that made money and then go out and do something else during the day. That seemed like a wonderful way to make a living."
"What we as traders can control is our risk appetite, which translates ultimately to managing the twin bugbears of greed and fear."
"While newcomers and the financial media focus on entry prices for stocks, seasoned market participants recognize that the exit is by far the more important of the two. The exit is what allows us to achieve the most important goal of a good trading system: to preserve capital."
"In uptrending markets, the trade optimization strategy is simple: use the definition of a uptrend (that is, higher highs and higher lows) to move sell-stops up as the lows get higher and higher...not aiming to get out at the tippy-top. Rather, the aim is to get out at the low that is closest to the top once the trend finally does end and the stock begins to decline."
"We let the market lead us, rather than trying to lead the market."
"Because most of technical analysis is based on prices trending, systems that employ technical concepts start to malfunction when there is not much of a trend...markets are trendless about a third of the time."
"If the breakout occurs below the stock's 50 or 200-day moving average, I often set a target exit for up to 100% of the position near that moving average."
"My trading strategy is based on buying breakouts, and I will happily buy them any time of day, except at the open. Breakouts at the open have a higher chance of failure for a number of reasons. At market open, trading desks are processing all the orders that people placed the night before and before they went to work. Volume may be high, but unlike at other times of day, this volume may not be representative of ongoing buying interest—more like a one-time charge. The market hasn't had a chance to get into a rhythm, so in a sense, the action at the open is out of context. One simply doesn't have any assurance whether there will be follow-on buying interest, or if instead the breakout will fail. Indeed, one strategy that traders use is to fade (meaning sell) the opening breakout, especially if it's on a gap up...waiting until 10:15 before entering orders."
"While there is money to be made, primarily by playing breakouts, the danger element means a high chance you'll just lose your money."
"Optimizing the trade means balancing two goals: maximizing profit potential and minimizing risk."
Mark Kingdon:
"It's important not to confuse investment genius with a bull market"
"I realized I was not in the high-performance-at-any-cost business," he reflects. "I was instead in the consistent-performance business, providing above-average returns with below-average risk. "
"I was taken with the idea that you could buy something that made money and then go out and do something else during the day. That seemed like a wonderful way to make a living."
"What we as traders can control is our risk appetite, which translates ultimately to managing the twin bugbears of greed and fear."
