lowtrade

[lowtrade]

I want to take this entry/exit strategy one step farther.

buy above ask; close first, sell below bid; close first, don't get caught in the order line

I believe strongly in this mantra, for day trading the OTC. Especially in fast moving stock plays. When I first started day trading the OTC, I don't know how many times I got caught in the bid/ask stacks hoping for close. Ending with chasing price, being passed by in either direction and costing more money in the scheme of things.

I only buy above ask and sell below bid, when day trading the OTC.

Your broker tries to get best price, but many times you will close a little higher or lower then bid/ask. But sometimes you just move from the middle or back of the order queue and close at top of the order queue, because you become first in the next level.

If daily action reverses and starts closing a large ask stack. Where's the best place for closing your entry decision? Closes to the top of the queue. But the ask stack is already established, so you end up at the bottom. If 5/10/15 trades are closing per minute/ 5 minutes, odds are the ask stack will change higher before it closes all orders. Then you get passed by and need to bump up you ask, again rarely to the top of the new ask queue.

How can you avoid this, which I'm sure has happened to everyone. When you make a decision to enter or exit for any reason. Be first. Take the ask stack a step higher and close! Reverse in retrace reversal.

If your trading a double zero stock, with bid/ask levels at triple zero .0001, tic's. It cost you $1 for every tic, trading $1k. If it's bid/ask levels are .001, it cost $10 per $1k. A 10% swing trade, in a double zero stock gains $100. It's all in the numbers. Is $1 to $10 worth getting in a run for 10% first, when something causes you to decide to enter? Or do you want to trust your chances the ask stack will reach your turn to close and save $1 to $10 dollars, sitting in the ask order line.

Food for thought !