DAYTRADING Fundamentals Message Board

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Strategies & Market Trends : DAYTRADING Fundamentals

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To: - who wrote (1151)	6/20/1999 3:33:00 AM
From: keith massey	Read Replies (1) of 18137

Question to the thread on the topic of stop losses. First....since everyone else is discussing their styles. TA pattern trader...I play only Canadian stocks (the top 50 liquid plays - normally TSE100 stocks) and futures at present. I'm a 3-5 trade person usually looking for at least .50 or greater on each trade with fairly tight stops. I also try and keep up on the major fundamentals of all the stocks I trade on a regularly basis so I can get at least get a feeling for how a stock will react to earnings/news/etc. As a hard core rule the second I buy a stock I throw my stop loss on. I place the stops based on key resistance level + the amount of pain I am willing to take. Stops haved saved my butt too many times to count and I refuse to trade without them. In Canada, the second one lot gets sold at your stop price your order becomes a market order. In Canada we don't have MM so it is first come first serve to everyone. This means you normally get filled within a couple pennies of your stop price unless the stock gaps down intra-day. My question is on stops on the NASDAQ. With MM in charge don't you run the risk of a stop getting filled far below your price, especially if you are trading only a moderate volume stock? If you use a limit on the stop and the stock really was in a free fall you risk not getting out. Since there is a big discussion capital preservation I am curious on people experiences with stops in the US. Do most of you guys use them or do you just keep you finger on the sell trigger? One of the main reason I don't trade US stocks very often is that I am from Winnipeg, Manitoba and you can't get an ECN connection here. This forces me to us a regular broker which I feel puts me at a disadvantage so I stick with the Canadian sector. Plus you can only trade your RRSP account (tax free retirement account) on Canadian stock (20% can be foreign). However a day trading firm (Swift trade) is opening in the next year so I might try a switch over when that time comes. Best Regards KEITH

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