From the February 01, 2012 issue of Futures Magazine • Subscribe!

Trading off the prior bar

Order strategies

Although a trader can sell on a stop or buy on a limit order below a bar, or buy on a stop or sell on a limit order above a bar, beginners only should enter on stops. It is simply easier emotionally to enter when the market is going your way than when it is going against you, as it is with a limit order entry. However, with experience, traders can enter with either stop or limit orders. In general, enter with stops when looking to enter as a pullback ends and a trend resumes, and when there is a major trend reversal (see “Entering with stop orders,” below). There must be a break of the trendline, a test of the trend’s extreme, and then a strong signal bar in the direction of the new trend.

<< Page 3 of 4 >>
comments powered by Disqus
Check out Futures Magazine - Polls on LockerDome on LockerDome