BPA trading room Q&A: June 17, 2015
As a strict Always In trader, I got chewed up today, should I have assumed that the day was overall Always In Long and just stayed long with the stop below 16 or 22 until it clearly went Always In Short. How does a strict Always In trader trade today?
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Trade management: Always In trading
To me, if I were trading today, as an Always In day, I’d buy 16 – the 16 high. And maybe I’d get out below 39. But if I got out below 39, I have to get back in long or short. Maybe I’d short 42, but I definitely would buy 47. And then I’d get out here below 80, but that would be it. So, to me, the Always In Longs are 16 and 47, and possibly get out below 39.
And Always In Short – it never really became Always In Short. So for a trader that was trading Always In, I think he would wait; maybe sell the 2 close? But, to me, the first trade that I would consider would be the 10 high, the first one that I took for a swing was the 16 high, and I got out with two points.
However, if I held, I would have gotten out with more. I’d get out below 80. It never really went Always In Short. After 16, the bears never really did enough. So for a person who’s strictly Always In, I think they’re staying long; maybe they get out below 39. But if they want to try to stay Always In trading, they got to get back long above 46, maybe above 50, 55.
Follow up question on breakout scalps
On a day like today, would you ever place limit order brackets to catch breakouts? If so, can you describe your approach? If not, can you explain why not?
Yeah, like I said earlier, on a day like today, if you want to make 10 to 20 points, the only way you do it is just scalping – and one-point scalps all day long. You buy the 1 low, you buy more lower; possibly sell the 2 close, but if you sell the 2 close, I think you cannot get out above 1. You have to sell more higher. You sell above 6, you buy the 9 close. Maybe buy above 10. If you buy above 10, you got to scale in lower. If you buy above 16, you buy 19 close. You buy the breakout test on the close of 22; you buy the 24, 25, 26 close. Bad follow through, 27, 28. Either get flat or you look to sell above bars: above 31, above 28, above 39; top half of either a weak bull channel or a trading range day.
I think you sell the 41 close. You don’t get filled on your profit order; you buy the 47 close; you probably even buy below 44, 45 if you’re really aggressive. And bottom half of this trading range, I’m only looking to buy — you buy the 50 low; you buy the 54, close the 55, close the 58 high, the 61 close, probably the 64 low, although you could sell the high of the day, the 35 close. And then you buy below bars – maybe below 64, 66, 68. And would I buy above 71? Maybe. I think it’s probably better to sell above 64, sell above 70.
And I’m sure there are many other scalps in there as well. If I was 20 years younger, that’s probably what I would do. Probably would not have taken all of those, but that’s how I would have approached the day just looking for one-point scalps. Looking to sell above new highs, and buy below prior lows. Looking to buy strong bear bars near the bottom; sell strong bull bars near the top. Use three or four-point stops and scale in.