Author: World Worst Stock Picker
Website: http://worldworststockpicker.com/2009/02/03/trade-entries.as…

A lot has been said about how to enter a trade. Some traders enter
at the open and some enter trades at the close. Some traders advise not
to enter a trade at lunch because is a period of low liquidity.

Some traders caution against entering a trade during the first 30 minutes of the trading day.

I
offer some ideas to enter trades: enter as close to the lows of the day
or enter when the 5-minute chart MACD histogram goes from negative to
positive.

The first method is great because it eliminates the
emotions of chasing a stock that gaps up at the open. A strategist will
average the difference between the opening price and the lows for the
most recent 5-10 trading days.

For example, if a stock XYZ has the following daily quotes:

Day 1: open: 51 low: 51 Difference=0
Day 2: open: 50 low: 49 Difference=-1
Day 3: open: 52 low: 50 Difference=-2
Day 4: open: 54 low: 53.5 Difference=-0.5
Day 5: open: 51 low: 49 Difference=-2

We have a open-to-low average of 0+(-1)+(-2)+(0.5)+(-2)=-5.5
Divide the 5.5… (Read the rest of this article at the following article source link for the full story)

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