DAYTRADING Fundamentals Message Board

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Strategies & Market Trends : DAYTRADING Fundamentals

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To: cloudless who wrote (5344)	11/12/1999 11:20:00 AM
From: Matthew L. Jones	Read Replies (2) of 18137

Cloudless, Actually, many professional day traders and swing traders find that the 2% rule is too high. I personally trade E-mini S&P's and I use a 1 point stop (that is four ticks). Furthermore, once the trade goes two points in my favor (three points from my original stop), I move my stop to half the distance between the high (or low) since I put the trade on and the original stop. Of course I day trade. What I had a hard time grasping when I started was that if I bailed out on a stop, that did not keep me from jumping back in again. That is why many traders look for entry points that are slightly above (long) or below (short) the support or resistance levels. That way if support is broken, you want out anyway. I hope this makes sense. Good luck trading. Long options, BTW, are very hard to trade because you have to have both direction and timing. Most people can generally get one or the other, but not both. Meanwhile if you get long too soon and you are right, you still lose money because of time decay on the options. Short options are much easier way of making money. Matt

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