When trading stocks for a quick ½ to a handful of points over a few days, as I am currently trying, getting the best entry price is important. My current system, once I have picked my stocks for the day, is to put in a buy limit (day) at the previous days close. But that has some problems. For example today I was going to buy BYD @ 18.91 But it gapped up so I missed it. And then I am a little afraid to chase it. So I have to pass on it. I also bought PENN another stock that hit my entry criteria and signal. But this stock had had two strong up days. So the question become should I wait for a retrace and get a better price. It did not retrace, but it might have. I might have been stuck holding a down position. When I want to bang out the trade and grab a point or so.
I have come through significant pain to embrace rules based trading. If this happens then I do that. But I am not sure if this limit entry on the previous close is really an optimal rules based entry system. I may be missing opportunities. Or it may be the safest middle ground.
I was just wondering if anyone had any opinions or suggestions on improving my entering system.
Thanks for any thoughts, and for sharing how you might pick your entry prices.