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The Drop ‘n’ Stop Trade Strategy

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Ameritrade: Great Features, Simple To Use, And Easy On Your Pocketbook Too!

Brad here again with some more trading news from the trenches. While many people like to trade from their hip pocket as it were using the experience and the savvy they have learned over the years. Many newbies and some pros like to have a one stop shopping place to go to get their trading done.

Once they find their favorite trading platform, they would like to find everything they want or need there as well. Well after looking over the prospects, Ameritrade is a place I’d go (and have) to get it all under one umbrella as well. You can even use your favorite Drop ‘n’ Stop Trading strategy and they would even blink an eyelash. Their tame Psychics wouldn’t mind either though you might fog up her crystal ball and shuffle her Tarot deck in an unconventional manner.  Today we’ll be looking at some of the different classes of trading signals you can get from Ameritrade and then you’ll have a clearer idea of what to expect from them and you can better gauge your profitability by using their site.

 

TD Ameritrade Stop Limit Order

You, of course, know that nothing is, as it seems when buying and selling on the Net. You can be making a fortune one moment and then crying in your cups the next. This is why many of us study the market’s fundamentals first and set our boundaries prior to entering into any trade. This doesn’t matter if you are doing Binary Options with the latest software or you are buying using a pencil and paper system.

One of the Keys is to use a “Stop Limit Order” (SLM), this is a point where you want to get out of a trade no matter what you emotions or better judgment dictates. This way, emotion is taken out of the loop and you trade emotionlessly like a Vulcan. In this way you minimize your loses in case something goes awry. Today’s market and the systems running it are much faster than you and I. So, it behooves us to be prepared.

 

You first select the stock you want to buy and then click on the “Buy” button at the bottom of your screen.

Next, select the number of shares you want to pick up and enter the minimum price to go in at. You then select the upper limit you are willing to tolerate. This gives you a range to work with. Once you’ve checked that everything is set the way you want it. Execute the order, sit back, and wait.

You have cocked the gun and when your stock enters the range, you’ve chosen/predicted the stop limit activation price for the trade goes through automatically.

 

You’ve now fired the gun, the trade is done, and you can now see the results for yourself. You should now have in your account the correct number of shares at the price range you specified. Once this is all setup, you can trade in your sleep and your wishes will be obeyed.

This is the closest thing you’ll get to rubbing Aladdin’s magic lamp. Ameritrade is the lamp and your stop loss commands do the rubbing and wishing for you.

 

Ameritrade Fees

All Brokers charge fees, except perhaps your uncle Al is he is a broker. There is no getting away from them.  Fortunately, those for Ameritrade are reasonable and easy to understand. For example for the TD Ameritrade limit order fee, it is a flat rate of $9.99 and $0.75 per contract. This is for the online trades. Offline and broker assisted goes up significantly at $45.00 + the $0.75 contract charge. So you see you can save a ton of cash by doing it all online for yourself without the help of a broker who basically acts like the software to execute the trade.

Getting a $45.00 for 5 minutes work on a terminal is a job we all wish we had. Then we might not be trading in the first place. The rest of their fees are listed out in a downloadable file that you can look at right here. https://www.advisorservices.com/content/advisor/pdfs/onlineforms/TDAI3444.pdf

 

Automated Trading

TD allows you to set up a series of conditions similar to that used with Linear Algebra. In this way, you can bracket a certain range of prices and if you have the pricing down and plan carefully. You could actually execute a series of trades before the computer cancels pending trades. This is when you do conditional trades they cancel the other pending trades once one of the conditionals is executed.

A TD Ameritrade Conditional Order allows you to place limits on your trades. You can set up also to have one order cancel another depending on which one is executed first. In addition, one order can trigger a series of trades or just one. Multiple triggers are possible and the signals you get from Ameritrade are in real time.

 

Trailing stop orders and TD Ameritrade trade triggers are easy to implement.

The triggers are set up using a handy tool called “Trade Triggers” that lets you set up the conditions you desire to execute your order with. This gives you two choices for execution. One is an email alert then you can execute the trade. The second method is the one many decide to go with as it executes the trade on your behalf.

You first set the trigger and next you set the type of trade to execute and the number of shares to buy or sell.

 

If you are a Buffet aficionado, you probably ignore this tool. Warren is said not to have any type of trading machine in his office as he trades with the long view and day trading is an anathema to him. Flipping stocks isn’t like flipping homes. You can lose your shirt. However, to get into a trade at a point you feel is advantageous is a use that this tool would be useful for. You can’t be watching all the markets all the time though some day traders seem to have a million eyes. I don’t and I like to let my projected entry points go on autopilot while I am setting up new trades. For example, when setting trades in a stagnant market I sometimes set a stop market and take my lumps if conditions don’t follow my predictions. Remember the stop market order definition is one that will execute at the current market value of the stock you are trading.

 

Cycle traders who have absolute faith in their crystal ball or Tarot Cards use this one a lot. When using Stop Market vs stop limit you have to know the difference. The latter will execute at or around the value, you choose depending on the way you set it up. The former will upon execution, run regardless of the current price and lets the market decide the profit you will receive. Trading Chaos is one methodology that would use this method as with the Elliot wave it is a combination of timing as well as setting you entry and exit points.

 

When you add all this up you now have a trading robot waiting for you to turn it on and do your trading in a hands-free manner. You can set all the conditionals you like all based on your decision points. If you recall Robert Lichello’s AIM system, this could be done quite easily and you would have your trading done like clockwork and your trades would follow the methodology without you having to lose any sleep as it all would be done based on the system that monitors the rise and fall of price as does his system. A little tweaking to reset the upper and lower boundaries would be all the work you’d need to do and the system would hum along splendidly and send you emails letting you know that it executed so you could change your parameter and keep track of where you are.

 

For the “Trading Chaos”, “Elliott Wave”, and Gann’s Squaring of the Nine” can use timing along with retraction levels to fit your trades into your predictive models as well. I employ these methods myself depending on the results I am trying to achieve. You might frown on this heresy of using multiple systems but I feel what works with one stock may not necessarily work with another.

 

In fact, I still have the famous Kreskin Crystal that was once sold as a novelty gift and found it to be as accurate as some of my other tools. I have heard of some traders who swear by their Tarot Readings, which brings to mind the Ameritrade commercials with the Gypsy Fortune teller. If Nostradamus were alive, today I would see what his scrying bowl would show as well. To me if a tool works for you use it. The Pendulum, Astrology, and even a crystal ball open up pathways and channels to the subconscious mind and whichever way helps you get in touch with yourself is ok in my box, unless of course it involves harming any living creature that is.

 

There some traders who combine Chines Numerology with their Candlestick trading and still others who use the Tao de Ching Hexagram sticks to predict market trends. Their results are in many cases, are better than those use you expensive computers and online signal services. I have tried using Diving rods I got from a tunnel rat in Vietnam who used them to locate tunnels in the jungle where the VC were hiding when he was in the Marine Core. My gas company has a set he uses with his expensive magnetometer to find my gas lines and to prevent tearing them up when they were laying new telephone and DSL cables for my Internet.

 

My Aunt Laura used to make tea and then used to tell my grandmother’s fortune and grandpa used her to help him pick his horses on the daily double. I even had one Instructor that used the Vedic text of the Mahabharata to do the same. Finally, my computer Instructor at a multimillion-dollar training center used two wire rods thrust through two wooden handles to locate damaged IC chips on multilayer circuit cards.

 

So, if it works for you use it. Then automate your results using TD & Ameritrade. So, you see whatever system you use to predict or track the market you can automate the results pretty easily.

 

Final Thoughts on Today’s topic

I like Ameritrade, as it is stable and a well thought out platform for use in trading online. It is cheaper than calling your broker or using some of the other services. I know I used them all at one time or another. I get results I want. Trading robots, Technical Analysis, and paper & pencil, as well as any other methodology, will work with TD and Ameritrade. No matter how exotic a trading system you follow, the mechanics are all the same. You get a buy or sell signal and you need to execute it in a certain span of time. You may need to execute sequential trades that key of a series of event. This is doable and you can set it to all run unattended while you deal with more pressing matters like living a life and having a family to raise as well as being a trader.

 

You can use 3rd party trading signals and set up conditional trades based on the information you receive from them or your service(s). With them, you can set up your trades and have them execute automatically or manually as you decide.

 

You have a plethora of options for controlling you entry and exit points.

You have a full suite of tools, video/tutorial, and live experts at your beck and call to help you. So, all in all, the newbie or the veteran trader will find what they want or need with one of the easiest trading systems in the Cloud today.

 

Brad signing off for today, see ya next time!

 

Until then “Happy Trading!”

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