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Strategies & Market Trends : DAYTRADING Fundamentals
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To: Tai Jin who wrote (3621)9/7/1999 1:21:00 AM
From: Bilow   of 18137
 
Hi Tai Jin; Looks like you got a lot of flack for scaling into your positions... Guess I'll have to come to your defense.

(This is in regard to continuing to short into a stock that is going up - shorting more as the stock rises.) I believe the real question is "could it be a part of a valid trading plan to intend to take a larger position as a stock continues to move against you?"

I think it could be a part of a reasonable trading strategy, but only if it were carried out with correct risk management. It feels, though, like a technique for getting into a position on a fundamental trade, rather than a TA trade.

You have to realize in advance that the stock is likely to continue to go against you, and you will have to have some sort of a stop loss at some price. But you would have to involve such a small number of shares that you do not have more than the usual 1 or 2% of your equity lost at that stop loss price. I believe this could be done.

-- Carl
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