Cascade Communications (CSCC) Message Board

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Technology Stocks : Cascade Communications (CSCC)

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To: Bull-like who wrote (2325)	2/22/1997 12:15:00 PM
From: Andreas Helke	of 3743

I started to avarage down at $39. This turned out to be a not so pleasant excercise of catching falling knives. Therefore I sold again at $35. I now have two open buy stop orders but have not yet bought back Cascade. I still have a few of my original longterm shares. A buy stop is the opposite of a stop loss order. It turns into a buy at market order when the share price rises above your limit. You only buy the shares when the prices are actualy rising. The risk is that the stop gets triggered by a dead cat bounce. If this happens then you simply pay more for the privilege of riding down the next wave. But with the relatively steady decline of Cascade the buy stop order removes the risk that the stock breaks out without me. On the other hand I still have my cash and can put in a new lower order if Cascade still gets cheaper. I think I will develop a strategy of replacing shares with buy stop orders when the risk reward ratio of my stocks gets too unattractive due to market conditions or excessive valuations. Buy stops of course only work to your atvantage if the prices are headed down otherwise you simply pay mor for your shares then necessary. Andreas

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