| Welcome Guest, please sign in to participate in a discussion. | Search | Active Topics | |
 Platinum Customer
Joined: 4/17/2006
Posts: 271
|
When a stock like SUAI looks ready to go, what are the advantages/disadvantages of: 1)buying at the open, limit yesterday's mid-range (i.e. around 8.22), vs 2) buying at the open, limit yesterday's high + .01 (8.46) vs 3)waiting 20-30 mins after open and deciding how/if to enter based on opening action? With a buy that looks like a pretty sure go, do you lean towards trying to get in low even if it means yo miss the move or do you still approach with caution and figure bid low and if you miss it, you miss it, there will be others? Advice on learning buying strategies? I'm kind of winging it at this point and would appreciate direction. Thanks much.
|
|
Registered User
Joined: 3/21/2006
Posts: 4,308
|
One good buying strategy is as follows:
If you see a good entry point and have decided you will take a position, then you want to buy into strength (as the price is moving up)
In the case of SUAI (very good pick by the way) you want to initiate a buy stop limit order at $8.55 (one cent over the high price of the day) It breaks down like this
Stop: $8.55 (means when the price reaches that level, you want all all action to stop, and a buy at the curent asking price to be initiated).
Limit: $8.65 (If the price is moving fast there is a limited range to which you are willing to pay)
Keep in mind that if the stock does not move up in price the next day, then you have not bought the stock..
This is how I usualy buy my stocks, but latley I am looking into Intraday entry points..
Good luck..
Apsll..
|
|
Registered User
Joined: 3/25/2005
Posts: 864
|
There are two methods I use in tandem to time entry:
1)The first involves determine whether the open price
opens above either the yesterday's close or the most
recent daily pivot point. If it opens above either of
these then you should enter the stock right away using
a limit order to time your entry in order to avoid
slippage. (I personally, never want to buy above the
open price, so I place a limit order to buy at the open
price or better).
2)If the open price opens below yesterday's close or
below the most recent daily pivot point (either one)
then use the 1 minute intraday chart to time your entry
by looking for the first or second back-to-back double
bottom (where the first bar is red and the second bar is green). I think of a double bottom as the 2 lows being
either equal to or within .08 of each other. At any rate,
I prefer that the double bottom still be below the open
price or else I will not enter the stock.
In order to find out the latest daily pivot point, add the high, low and close from yesterday together and divide by 3.
|
|
Registered User
Joined: 1/28/2005
Posts: 6,049
|
Basically the "looser" your entry requirements
(buy at open, by at market) the more certainty
you will enter the trade.
If you place all types of limits. You will get the price
you want but may "miss" the trade altogether.
Another factor is how you trade. Taking large positions
(relative to your portfolio) for short time periods makes
price more important.
Purchasing for a 1 to 3 month holding period
(where a stock can go up 10,15,20%) makes entry
price less important.
Thanks
diceman
|
|
Registered User
Joined: 1/28/2005
Posts: 6,049
|
Its funny. I did not look at the chart before I posted.
(I did not expect it to look like this)
I would only consider this "ready to go" when its starts
going.
Look at the mid March to mid July period. (you could be in
for a wait like that)
I would wait for some conformation like the AUG to DEC
period that it is actually going up.
If you add a short-term oscillator you can find low risk entry's while
the trend is underway.
For example. in the Aug/Dec run-up. If you apply a
5,10,5 MACD histogram.(any small values should work)
You will see low risk entry's approx. 8/18/06, 8/30/06,
9/22/06,10/18/06
When the oscillator is negative and turns up.
Thanks
diceman
|
|
Platinum Customer
Joined: 4/17/2006
Posts: 271
|
Apsll, memorable and diceman, Thanks so much for your feedback. Your suggestions give me arrows to put in my quiver...Over time I'll try different arrows and eventually figure out what works for me. While I had an empty arsenal before as far as buying strategies, I have a little ammo now. And diceman, your thoughts re timing are important. Being a rookie, I find I'd kind of chomping on the bit and anxious to get going...I'm learning how important patience and looking at the big picture is. I guess I might not have looked back far enough. I was seeing a supporting trendline from mid-June to end of July and then mid-Jan '07 which is where I was thinking the price was starting to bounce up off that trendline with good buildup of BOP, MS, TSV. But no, waiting through a flat period like much of 2006 sure isn't what I want to do with my money. I am trying a shorter MACD as you suggest; since I tend to go for short term trades this seems to be better suited to my style.
Thanks for all the food for thought.
|
|
Registered User
Joined: 4/18/2005
Posts: 4,090
|
I have by and large had excellent results with ASPLL's sort of entries...depending on my aims I'll pic support from long term (weekly) daily, or intra day charts to keep losses low. I know that it seems funny to want to pay more for a stock than it is currently trading at but the logic is as ASPLL said is to buy into strength.
I have heard of and tried on paper with moderate sucess entering orders BELOW their current price at suspected resistance and bounce points.
AKAM would be an example.. it is range bound and I am, on paper, placing an order under price in the upper reigion of the lowere range (that comfused me to, in the botom 1/3 of the range) with a stop under the lowest of the range. Again my best entries have been the buy stop limit over price. On RARE ocasions with stocks that I know like to ZOOM I'll enter a market order if I see in the premarket they are set to gap open...and then if I dont have time to enter a proper stop limit above price... to avoid the day that gaps up and falls. CRDN, AKAM, and GROW are examples of those guys that love to gap after a proper setup.
History is important.. the more the better. I like to at least glance at the complete history of the stock. Sometimes you find deal killers in the distant past... but I tend to walk past to many trades based on far distant resistance.
|
|
|
Guest-1 |