Strategic Tradingfrom

Two AccountsHare Krishna Mitra

16th June, 2012

Stop Loss

Break out Trades

Trend within a Trend

Components provoking the Idea

Fundamental based Price Action Based Indicator based

◦ Moving Average based◦ Oscillator based◦ Channel based

Hybrid◦ Combination of price action and indicators

Fixed Dollar Stop based on ATR A fixed percent stop

Stop Loss

◦ Getting stopped out frequently when it is too close

◦ Probability of loosing a large amount when it is too wide

◦ Optimum stop loss is a function of market volatility

Challenges with Stop Loss

While expecting the price to come out of a trading range the entry point and stop loss determination is a daunting task

Stop needs to be wide An unexpected news event could sour an

otherwise winning trade

Challenges with Break out Trades

While trying to catch a bigger trend often times we miss multiple smaller swing opportunities

We also miss a bigger trend while focusing on smaller swings

Challenges of Trend within a Trend

It consists of two components -◦ Taking a long position from one account◦ Taking a short position from a companion account

Two components, long & short, could be taken -◦ At the same price level◦ At slightly different price levels◦ At completely different price levels

Trading from Two accounts

This kind of entry can be taken to capture breakout trades

Same Price Level Entry

Seller Concentration Area / Resistance Zone

Buy stop

Sell stop

Trading from one acct. Trading from two accts.

Long from acct. A

Short from acct. B

Seller Concentration Area / Resistance Zone

Stop for acct. A

Stop for acct. B

This can be utilized for reducing the loss in case the trade is stopped out while giving the trade (pair) enough room for fluctuation

Slightly Different Price Level Entry

Entry Point

Stop Loss

1 ATR

Long Entry from acct. A

Cover the short: acct. Bat a buy signal or close the long: acct. A at a sell signal or close both

0.5 ATR

Short Entry from acct. B2 ATR

Trading from one acct. Trading from two accts.

This can be deployed to capture the bigger trend from one acct. and profit from the smaller trends within from the other acct.

Completely different Price Level Entry

Long: acct. A

Short: acct. B Take profit: acct. A

& acct. B

Cover: acct. B

Good Luck & Good Trading!