Price "FILL" Advantage

Cycle Trader Pro's trade models suggest to never go all in on your first entry level and at the same time reach for the first fill to start the trade. The first fill and how you find this price level is key to your exit price level(s) and the 2nd entry.

If you have a contract limit of 20 contracts for example. The the models suggest to start with 10% of you set limits, and at the same time use the same number of contracts at each consecutive entry level. 



We have 2 models with similar names. 

1. Price Advantage - This model suggest to buy low and sell high even if it is below your break-even point. 

2. Price "Fill" Advantage - This model suggest that your first entry is key to the entire trade. We termed this Price "Fill" Advantage to indicate it is important to have an advantage on your first entry level. 

The first fill sets up the 2nd entry level. If you reach for your first fill, you have and advantage setup on price level and the 2nd fill will improve your first entry level by 50%.  

For example, if you enter at 20 and then enter at 10, your average price would be 15, 50% better. 

The 2nd entry is always the same in our book. We wait for the market to fill the first entry level. Then we wait to see how far it wants to go. We don't really care much about the move, but we are looking for a pull back of 3 to 15 points depending on the market traded. At this point, our 2nd entry level will be the same 3 to 15 points above or below the extended move to get the 2nd contract(s).

This again, improves out 1st entry average price by 50%. This is a big number and is important to learning how to buy bottoms and sell tops. 

We will automatically look to create a Price Advantage using the 2nd entry. 

How to find your Price "Fill" Advantage?

We use a number of models and go over this every day in the Prophet Target Trade Room.

Models that can be used to find your Price "Fill" Advantages -
  • Prophet Target
  • Take out swing high/lows
  • Divergent High/Lows
  • Stab Buy/Sell
  • Extended 4 to 9 Bar Cycle High/Lows
  • VMI Turns
  • Fail The Moving Average
This is just a small list of ideas, but in all the models above, if you are to enter the market, it would more than likely you are selling green bars and buying red bars to enter. We found that most traders have a hard time with this if they don't have a plan. We have a plan. 

Thought - How many times have you been in a trade and could have done better entering? Probably 99% of the time... right? So, use the high odds and rather than doing a market order to enter and give away your edge, reach for price levels. 

Price Advantage model - 

Once you get your 2nd fill, you have the option to use Price Advantage, meaning, you will automatically work to exit the 2nd entries X points away in an attempt to enter them better if they get filled on the exit(s). 

Each time we are able to maintain the core 1st entry position and set up Price Advantages, we are improving our average price each and every time. 

Many times, your exit on the 2nd entry and all Price Advantage entries can be below your True Average Price. 



Comments

Popular posts from this blog

Walter Bressert's Best Trade Setup

100 Percent Bars

4 to 9 Bar Cycle Count