October 21, 2011
- in Uncategorized by schooloftrade
Don’t make this mistake when you SCALE-INTO your trades
Scale-into a trade:
– Double-down in poker
– Dollar-cost average
– I am adding to my position as the price goes against my position.
– Example:
o I’m short crude oil futures from 90.00 and when price hits 91.00 I sell another contract, at 92.00 I sell another contract, in the hopes that when it does come back down I will be able to profit from that.
Concerns:
– Can you afford the FULL loss that will come from the average of all contracts.
– You may not be aware of how this market usually moves. When does it USUALLY reverse?
– How much risk are you willing to take on this trade?
o Remember this may be an average of your entry prices
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Colors on Time and Sales:
Grey color on the time and sales = buyers at HOD or Sellers at the LOD.
Grey background signals trades at the HOD or the LOD.
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Using the AB=CD
Watch this video on the blog
or log into your advanced course and watch the training from 10-17-11
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What is overbought / oversold?
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Entry techniques:
– Your broker (sales@schooloftrade.com
– Your internet connection (no wireless, must be consistent)
– Be prepared for the trade you take by anticipating the trade before it happens.
Fast Track = Limit Order (no way to miss the trade)
Advanced Method = we use a technique called the ‘trap’ which ensures I get the best fills without getting chasing the trade.
Trap = uses buy and sell stops.
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Tomorrow for OPEX?
– Very similar to any other Friday, except for the earlier close to the morning
– After 1030am on OPEX Friday we expect to see volume dropping quickly.
– By Friday the traders are already done.
