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Strategies & Market Trends : A.I.M Users Group Bulletin Board
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To: RFH who wrote (8869)10/12/1999 11:57:00 AM
From: OldAIMGuy  Read Replies (3) of 18928
 
Hi RFH, On some of these lower priced holdings, they almost beg for higher Resistance (SAFE) values than 10%.

I use Buy = 15%, Sell = 15% on STKL for instance. It sells for about a buck a share right now. The reason I use an expanded SAFE value here is because the stock's price range supports a more profitable SAFE range.

With NERX's selling price of about $1.688, I use SAFE values of Buy = 20% and same for Sell SAFE. Again, the reason is that the stock's price swings support a broad, more profitable range.

Sometimes with these low priced shares the Bid/Ask spread is such that an expanded Hold Zone seems to be appropriate. I make these changes as "seat of the pants" adjustments and don't have lots of science or examples to back them up. I guess it's that if I'm going to play with low priced stocks, I want to have a fatter reward for the risks involved.

With DROOY, you might try changing the Resistance values in the "What If" window and see what it does with your trade range. Your current LIFO gross profit with the resistance levels you have is about 30% (you just bought at $1.875 and you'll next sell at $2.4375). Looking at the Line Graph, it would appear that you might be able to sweeten that a bit and still get plenty of trade activity.

Just a thought,
Tom
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