Highlighted above in a pleasing green hue is the entry for Thursday’s open.
This trade is either going to work, or not, fairly quickly. Notice that the stop (assuming there is no gap up or down on SKF tomorrow) is just beneath today’s low. The stop level is 8% beneath the estimated open tomorrow. 88 shares will be purchased as that equals 2% risk assuming the entry is the same as tonight’s close.
I also wanted to note that the ATR(14) on SKF is 22.31 (pane beneath MACD). That means the average daily move can have a range of over 22 dollars. Again, this trade may get stopped out pretty quickly if doesn’t go in the expected direction right away.
88 shares? Buy all in, at least.
Hey, we’re off to a good start, so naturally, I assume we win again.
You ever think think of doing 4%?
Danny, I don’t decide the amount of shares. It is risking 2% of current equity using an 8% stop.
The system used to use a 4% stop. I moved it to 8% after the crazy volatility in Oct. and Nov.
If you mean risking 4% per trade, I don’t recommend that level of risk as it is likely that 4% risk per trade would create a drawdown that would cause most people to quit trading the system.
For example, the system had 8 losing trades in a row. At 4% per trade, you’re looking at better than a 25% drawdown.
I know, I was just joshin about the whole thing.
I was suggesting 4% risk. Maybe that is too levered.
I wouldn’t go more than 3%.
Too much can go wrong above that. For example, the big bamboo has had some gap past the stop, racking up bigger losses than expected.
4% leaves no room for error.
Indeud.
Hey, you can bump up your post since it was only on for a sec, I just needed to post my key to all answers chart.
No big deal. I think most everyone is used to my posts always being on the bottom! 😉
awesome. post this in forums.
Do us all a favor… Make a Big Bamboo thread in forums.
You once stated that you are inquisitive about the dark side of man:
http://video.google.com/videoplay?docid=1070329053600562261
do your home work…it is all verified…
“This trade is either going to work, or not…”
LOL.
Yeah, yeah…out of context a bit, but still.
I’m ready to bank some coin on/with the Big Woody! And hedge my semi-bullish positions.
Fell asleep early last night and missed the discussion.
It looks like SKF is going to gap down. Remember to adjust stop so that it is 8% beneath the entry.
If today is a trend day, this will likely stop out.
The only thing that might save it is a large gap on the indexes, and then they just kind of hover in that range all day.
This might be a little simplistic when compared to the Big Bamboo; nonetheless it has been performing quite well. It sells SKF when it’s overbought, based on a 5 day RSI (currently it only trades on the short side):
Follow-up: http://optionspot.blogspot.com/2009/02/skf-shorting-strategy-continues-to.html
Original: http://optionspot.blogspot.com/2009/02/shorting-strategy-for-skf.html
SKF is pretty much going to gap down to your stop here this morning.
I don’t see any support levels until 120 or so. Are you counting on bad news tomorrow?
Yesman, in a comment above, I state to make sure stop is 8% beneath entry.
System trades have nothing to do with what I think or believe. I could care less about news, bad or good. I could care less about support or resistance.
The only thing I care about is the 200+% ROI this system returned in 2008.
It is too early in 2009 to gauge how it will do, as I believe it has only traded twice thus far (both winners.)
Now, as for my opinion, I like buying these on the gap down as I have personally noted the markets tend to reverse to fill a large gap.
Bain, very cool! Thanks for the link. I’ll give it more time this evening.
http://ibankcoin.com/chart_addict/?p=462#comment-2848
yesman or whatever the fuck you call yourself:
If you don’t know what system trading is why are you trading?
I mean seriously, this is the type of uneducated traders that IBC now attracts, man have things gone down hill.
Your IP should be blocked.
LOL
Big Bambi FTW!
Thanks, ‘Shredder. Tonight, we dine on turtle soup!
for the win
Good deal guys. No exit signal yet though. I am sick as a dog and will not be blogging tonight.
big bamboo rules!
Yep! Up almost 14 points. I’ll update tonight…