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Technology Stocks : Cymer (CYMI)
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To: Charlie Schultz who wrote (4014)9/29/1997 10:15:00 AM
From: mauser96   of 25960
 
It makes good sense to set exit points in advance before you become emotionally entangled in a stock. The disadvantage is that it ties you to obsolete old information. The most rational approach would be a stop based on past stock volitility, perhaps so many standard deviations from a moving average rather than a fixed amount. This allows for changes in the normal price variations (random walk)of the stock. The comments have started me thinking about this way to avoid big losses. I have a program (TC2000) that allows construction of standard deviations, so I will work on the idea. I doubt that exit points like this would have been a lot of use in the Cymer collapse, which happened so quickly. I have also noticed that stop loss orders tend to be picked off by the specialsts and floor traders.
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