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Catching Big Waves - a trader's journal of surfing the the markets


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Catching Big Waves - a trader's journal of surfing the the markets

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  #391 (permalink)
 josh 
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GaryD View Post
A word of warning; NT users and possibly others, OCO orders ride on your computer. That means if your stop los hits, your profit target will only cancel if your computer is connected to the data. And, if it is not connected, you have a naked order in the market, that if hit, has no stop loss attached to it. If anyone is considering overnight trades, you might also consider removing your OCO brackets and placing a stop loss manually.

The only safe way to play this is to have a stop loss only with no take profit limit order. Then use the trailing stop loss feature to move the stop, OR, for a target-or-stop only type trade, use the breakeven stop feature to have the stop loss move to within a few ticks shy of your target when it is reached. So for example, if my target is 100 ticks from entry, have the breakeven stop set to move 90 ticks from entry when 100 ticks is reached. This way even if the connection goes down, you are left with at worst, your stop getting hit, even if your target is reached, which is far better than a target being reached, and then an order left in the market without you being aware.

Even in this scenario it's possible that in a low liquidity situation, where there is a spike and quick counter in the other direction, that the stop order does not get moved. The bottom line is, there's no way other than at the broker level to guarantee OCO orders. Unfortunately most brokers (to my knowledge) do not support these orders, and they are frequently locally simulated.

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  #392 (permalink)
 Surly 
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GaryD - thanks. Your work ethic and level of analysis sets a high bar. I appreciate you taking the time to provide this example for the rest of us and share the way you're looking at the charts. I personally find it really helpful.

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  #393 (permalink)
 GaryD 
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As much as I was prepared for a wave 5, I did not take the overnight trade. I just got to my charts to see what happened, and crude did fall, but stopped short of it's preferred target and has now formed a local double bottom. This is a potential game changer and causes me to be far more cautious of the short side.


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  #394 (permalink)
 GaryD 
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josh View Post
The only safe way to play this is to have a stop loss only with no take profit limit order. Then use the trailing stop loss feature to move the stop, OR, for a target-or-stop only type trade, use the breakeven stop feature to have the stop loss move to within a few ticks shy of your target when it is reached. So for example, if my target is 100 ticks from entry, have the breakeven stop set to move 90 ticks from entry when 100 ticks is reached. This way even if the connection goes down, you are left with at worst, your stop getting hit, even if your target is reached, which is far better than a target being reached, and then an order left in the market without you being aware.

Even in this scenario it's possible that in a low liquidity situation, where there is a spike and quick counter in the other direction, that the stop order does not get moved. The bottom line is, there's no way other than at the broker level to guarantee OCO orders. Unfortunately most brokers (to my knowledge) do not support these orders, and they are frequently locally simulated.


That is correct, at least from my experience. I have learned about OCOs not triggering and putting me back in the market without a stop loss, and also about price skipping past my stop, the hard way. On the OCO issue. I woke up one morning a few years ago to find myself over 200 ticks down, multiple contract, on a trade I never intended to be in. One of my OCO orders triggered (I forget now whether it was the profit or stop loss), and my internet connection was down so it did not send the OCO. The market reversed, caught up to the opposite order, and off it went. Had the power gone down, my battery backup would have sounded an alarm, which would have caused me to get up and check the trade. But somehow the internet provider went down without a sound. Memories...

Trading overnight has some serious additional risks, which is why I miss a lot of the biggest moves and have learned to set my targets smaller.

I wound up passing on taking the short last night for that reason. My desire for huge swings was overcome by my fear of less control, and in that case fear may be a good thing. I do often think about it, and some day may decide differently, but today I am not ready. It is a constant conversation in my mind though... Maybe that is my version of the "holy grail", a psychological version, where I am able to let trades ride forever, have risk to reward of 30 to 1 and be ok with being wrong 15 times in a row.

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  #395 (permalink)
 GaryD 
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I have not traded gold in over a year, but used to trade it daily. I was reading that gold and silver took some of the highest percentage falls last week, or maybe just one-day falls, so I decided to do some analysis on gold. Gold found support right at the prime area I was looking at last night, although I neglected to post the chart here. The confluence zone of the prior high pivots, plus the major trendline, plus the 786 retracement.


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  #396 (permalink)
 GaryD 
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Crude is in a very volatile trading range. In cases like this, taking a typical reversal trigger can fail often. The gold numbers are from the indicator "Price Action Swing". In this one view, notice how many are over 100; 115, 125, 150, 230, 132, 157, 161...

The short term trend as of this morning is up, with somewhat bullish structure below, but crude is not exactly happy about it.


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  #397 (permalink)
 GaryD 
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I am still flat for the day. I don't trade well in this type of market. There was a valid long signal at 10:40am, but I passed.

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  #398 (permalink)
 GaryD 
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  #399 (permalink)
 GaryD 
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Closed -4. ES not looking right

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  #400 (permalink)
 GaryD 
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s+38. Still not sure what to think here. I believe stops overhead will blow, but this area is confirmed resistance.

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Last Updated on May 23, 2014


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