$USD was weakening overnight but we'll have to see what Hank and Lame Duck Dino do, if anything.

PBOC governor Zhou yesterday afternoon stated that China has a 'clear plan to diversify reserves.'
Gold up, dollar down.
This morning he that China has 'No plans to speed up diversification' and 'no plans to sell dollars.'

..awaiting to see what the oil market does when it opens in the US today...

.. will yesterday's move up be retraced or hold?

The Chinese statements are like past comments. General remarks about diversification, followed by no plans to sell dollars (that they already have), no details. They don't explain what they'll do about future revenues which would make sense to diversify.

Let's see what comes out of the meeting in Switzerland which began today.

.. here's a tip for st trading oils if people are interested...

...notice this morning that the XOI is holding flat so far.. but all the Canadian oils are down...

Once you get a clear direction for oil stocks for the day - you can trade for the spread to even up.

Just a quick question about using stop orders. I recently got burned by selling at market and watching the stock go up another couple of percent the next two days, so I decided I gotta figure stop orders out :)

Royal Bank Action Direct allows Stop Limit orders, and while their help says setting Stop price only makes it a market order once stop price is breached, the order page doesn't allow just a stop price, oops on their part (unless I'm missing something).

So I guess I'm wondering if anybody could weigh in on:

- Do you even sell at market rather than use a stop? I.e. if a stock rallies 5%, if I raise my stop 3%, i'd worry the stock gaps down the next day and wipes out the gain.

- How far bellow the price do you set the stop? do you use the open/close/current price?

- As for stop limit, how far below the stop price do you set the limit price?

Thank you all for the great insights and continuing contributions provided in this forum!

And how do you get line breaks to work in the comments!!!!

Nevermind on line breaks, just the preview that's broken :)

proudPapa,

Would like to help you out but I don't think you provide enough information. Are you sure you understand the difference between a Stop Order and a Stop Limit Order? They're two different things. A Stop becomes a Market Sell Order while a Stop Limit becomes a Limit Sell Order (in either case, when the stock trades at or below your price). What does that mean? Well the main difference would occur when the stock gaps down below that price at the open. With a Stop Order, you may get stopped out below your preferred price but at least you're out. With a Stop Limit Order, you would still be in the stock and subject to further losses - unless you're lucky enough to have the stock bounce back up to your Limit price.

As far as where to put stop orders, nobody can really give you a definitive answer on that. It depends on your trading style and timeframe, risk tolerance, the volatility of a given stock etc.

Miner down across the board--FCX getting hammered today, down about 5% at this point.

Uh oh.

Gold down today, VFGI up. Watch out for BG today, g034!

Still, I appreciate a guy that can teach a methodology….a guy that can teach one to think….thanks Bill. That's much more useful to me than a guy who chimes in to say how he vacuumed up in a dubious corner that Bill overlooked.

Not only that, but, like MarkM, I built an automatic kicking machine to punish myself for selling a big chunk of gold day before yesterday! (as did MarkM?) How could I be so stupid!! But now gold is giving back all & heading who knows where. Now I am a genious!

What a nutty way to pass one's time!

Tom - for a second you scared me! I thought you were talking about BG Bunge! Personal holding that I didn't have any inside info on and has done very well (and outperformed VFGI, btw), bears watching at this resistance level.

Have a great day!

(Not recommending BG!)

And to proudPapa: (boy or girl, btw. congratualtions)

I swear there's a little guy in my computer who telegraphs all my stop orders to someone else. If there was a company that profited everytime a stock touched by stop price, kicking me out, and then shot to the moon, I would buy that company and retire. It would be enough to set me up for life.

(third comment. that's enough. sorry)

Pretty sure I understand basics of stop order. Like I said, I think my brokers site is broken in terms of not allowing plain stop order (market order once stop price touched).

I read about 'tightening your stops' when market gets a bit heated, which I guess makes sense. But then I hear about people getting stopped out and missing out on big moves (been there tom :)

Lately trading more miners which tend to be volatile, like 2-5% moves in a day, so just wondering if people had strategies like putting a stop 5% below a price to try and avoid get stopped out prematurely.

With the mostly sideways action lately, i'm thinking having 'loose' stops is safer as stocks swing a lot each way? As opposed to strong positive momentum where they go down less than up, where tight stops would be better.

And what constitues a loose or tight stop? 2% and 5%? Guess it depends on volatility as well.

I guess my question is kind of vague... but I've been trading for many years, and think I put my first stop limit order in this week 8|

So any suggestions/guidance is much appreciated.

Thanks!

and btw: boy and girl, close in age but not twins...

ProudPapa:

On balance, I'm not sure if stops have helped my trading.

2% 5% I've tried them. They can all be useful, but they can all backfire.

Too much reliance on them may be more trouble than it's worth. It may be best to keep your holdings few enough so that you can always keep a sharp eye on them.

Other than that, larger stops (8% or more) may be useful to guard against end-of-the-world days which, thankfully, are not frequent.

You may do well to adjust your stops per the current charts. That makes sense. But be careful. When I set stops this way, I tend to choose easily guessed stop points that the big boys use to bat me back and forth like a tennis ball.

You'll notice I couch my remarks with "it may" and "possibly." That's becasue I really don't know. Just some off-the-cuff impressions.

And you must be careful not to use stops as a substitute for sloppy fundamental research.

Just following up on my post this morning about trading oils...

The Canadian Oils broke their uptrend right on the opening. 1st sign of weakness.

After the drop there was no bounce despite its American counterpart the XOI holding steady - 2nd sign of weakness for Canadian Oils.

XOI had already broken the uptrend on its 5 min chart yesterday.
It bounced off this trendline right on the NYMEX open quite hard.
3 signs of weakness.

By then we had a large price spread - with XOI stocks mostly flat and the Canadian Oils down 1%.

I traded this spread.
Either the XOI was going lower - or we would get a reversal and the Canadian oils would catch up.

Given 3 signs of weakness - I went with a short on some US oil stocks.

I covered when oil hit my 59.6 target.

Sometimes when the signs aren't as clear
I hedge it by going long the other market (in this case long a Canadian oil)

This trade does not always work - as oil has to move at least $1 from the open.
If it does not move $1 - I often end up with nil or small controlled losses.

It is a safer trade though (safer than a straight st oil stock trade) - because of the spread between the 2 markets.

P.S
Often I find the traders on the Canadian side get the direction of oil right shortterm.

The American XOI index traders sometimes seem to be doing their 'own' thing - this is what leads to the spread and hence the opportunity.

Both markets should in reality be confirming the same thing - if not - a st trend change is probably coming.

---

hope other traders found this useful...

I'd be interested to hear from others who trade the oils...

t'man

Re: Stops

I am a long-term investor and I have been using trailing stops on positions where I have a profit I want to protect, but the RSI levels are not high enough for me to sell outright. I found using a 14 day ATR (average true range) multiplied by a factor of either 1.5 or 2 depending on market conditions, helps me in two ways. By just knowing what an "average" stock price movement is, it keeps me from panicking. Even if I am stopped out and the next day the stock takes off, I find it easier to take since there was some logic used in my stop placement. The only type of trailing stops my broker lets me place will kick off a market order when it's activated.

Thank you to everyone on this board, I have learned soooo much!

Miggs

started shorts on the dow and qqqq (went long dog and psq) at the close. still long the xau, but swapped out of large caps yesterday and into the juniors today.

tradesman, I admire anyone who can make a nickel on a day like today. I didn't do much myself as I don't do this for a living and job responsibilities to attend to, but when I checked the market midday it looked like the last gasp of a tired bull.

Really, really crappy stocks going up on virtually no volume. I suspect it was a classic short squeeze on a light volume trading day.

Much appreciate your sharing, even if I am among those without the time or skill to trade the same way.

number2son

.. the way I look at it...

Every minute of every hour there is an opportunity there somewhere in the market.

The worst thing IMO is missing a great trade...
and I find myself kicking myself for not trading RIMM today - silly to have missed that.

Speaking of RIMM -
It is humourous to see that today it traded more $ in Market Cap than the Company makes in earnings in an entire quarter!

It seems that Wall Street is making more money off of trading RIMM than RIMM can make itself!!

Tradesman,
How much room do you allow for a stock to go against you before you bail out on a day trading basis as well as a swing basis? I seem to be able to buy right but end up selling to soon when it moves against me on its way to making a great move in my direction. That is the worst thing for me. I need to get a handle on that. It is what has kept me from being a successful trader rather than being a tinnie profiteer.

stktrader

On a Day Trade…

I usually trade large.
I only trade when I am confident of the trade.
And only when my ‘setup' is confirmed technically.
I usually don't scalp – I look at least for a 3:1 profit-to-loss situation.
I am more a conventional day trader – attempting to buy the bottom of the day and selling as the momentum peaks. (or selling the breakdown and buying back when the fear subsides)

If I am proven wrong by the market– then I stop out immediately - usually limiting it to a $200 -$250 loss.
This is ironclad.
I don't stop out and reverse either.
If I was wrong - I was wrong.
So I don't chase the trade in the opposite direction – I await the next setup instead.

Now that's the easy part.
The hard part is keeping the money.

My rules are this:

(1) If the day trade shows a small profit only – I cash it all out by the end of the day – Unless there is a strong momentum with volume into the close – in this case it becomes an overnight trade.
Unless its Friday - in which case it is automatically closed.

(2) If the trade reached my 3:1 goal – then I cash it all out unless: I have certain technical indications to turn it into an overnight position trade - In which case I sell 1/2 and let the rest ride.
(3) If the trade exceeded my 3:1 goal – then I cash 1/2 out automatically and let the rest ride.
(4) If it was a Buying Panic day or a 6:1 win – then I cash 2/3 out and let the rest ride.

At this point the Day trade has become a swing trade essentially.

My rules to trade the swing are this:

Keep the trade open unless
(a) It closes below:
SMA of (High+Low+Close)/3 Offset by 1
or
(b) It is stopped out by a price change based upon some multiple of the ATR

I try to keep it simple.
No fancy indicators.

This simple system allows me to try to pull some profit out of the market each day – and to keep some in the trade for further upside.

...

If I can make one other comment – that based upon your statements – it seems to me you are more fearful and concerned about losing – than winning. I used to be this way.

This will keep you from making the really 'Big' trades.

The way I look at it.
You can still be wrong 3 out of everyone 5 times but still make money.
For the 3 trades I'm wrong I lose $200 ($600 total)
Maybe the 4th trade is a small one and makes $600 – so I'm even again.
But the 5th trade is the big one and makes $1500.

Repeat this every day - and well that's not bad.

---

For the record, I am not a Pro.
But I have been doing this for about 3 years.
Full time some days – and 3-4 hours on other days.
I have attained some level of consistency and an OK income.

I trade about 80% of my account this way.

The other 20% is more investment oriented and uses methods more like Bill teaches in his blog.

Also keep in mind that this style of trading may not work for everyone.

Hope this helps…

Thanks Tradesman,
I read it but I am going to break it down fully tomorrow and start applying. You are right. I am dictated by fear. I need to give more room for losses which will give me bigger winners in the long run. On Wednesday I bought USO near the close at 52.60. One cent off the low of the day. 1000 shares. Within a few minutes it went up to 52.76 and then oil started to trade lower into the last 20 minutes of the pits close near 59. USO started to go lower down to 52.65 and going lower. I was "afraid" that it was going to trade through the low of the day at 52.59 and then go into a fast market condition. I sold at 52.64 for a $20 profit. I had assumed that the shorts were going to cover. USO traded down to 52.62 and then shot up a few moments after I got out and advanced on short covering for a 750 dollar gain in the next ten minutes closing near the high of the day. That's me! I have heard that one needs to get into position and then place a stop loss and step away and let the trade unfold. Does that sound reasonable?

tom-

No. Didn't trade any gold positions. Still thinking this will be too shallow to trade. But what do I know?