>> In the meanwhile, a strategy of trailing stops should go a long way
toward protecting the downside.<<
********
Hi, I am new to this thread, and my response to your post is not intended as a flame in any sense, but I do differ with regard to the statement you made above.
The Naz is a transparent market. The MMs see all orders. When a holder puts in a sell stop, they see that sell stop.
If they need to cover their short position (as is often the case since inventory isn't held very often), the MMs will use any slight sells as an excuse to increase the spread downward, and dip intraday to recover those shares placed as a sell stop, and the close the spread, moving the bid back up.
It happens countless times on the Naz. IMHO your strategy is appropriate and useful on the NYSE, particularly with very liquid stocks.
When you place a sell stop (particularly in an upward move of this brief duration), IMHO, all you are ensuring is intra-day volatility and, as another SI poster once said about the same situation and concept, creating "an accident waiting to happen."
So if you want to max you upward trading potential and help cool volatility on the downside, IMHO, put in a sell order when you reach your target price (by keeping a close watch on the stock during the trading day).
All offered IMHO,
Ed |
