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Gold/Mining/Energy : Day trading in Canada
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To: keith massey who wrote (3175)5/13/1999 5:13:00 PM
From: Greg from Edmonton  Read Replies (1) of 4467
 
I originally posted this on another thread, but I suppose it really belongs here. I have a few questions regarding trading strategies using stop buy orders. Here is my original query #reply-9510628

Since yesterday's discussion of short squeezes and covering using stop buy orders (on the "Daytrading Canadian Realtime" thread) I have wondered if it might be a good strategy to use with a stock which might be 'expectant' of news.

The buy strategy would be to set a stop buy order just above a stock's trading range in case of a breakout and re-evaluate daily. In the case of GLE on Wednesday $8.35 buy and $8.60 limit would have worked out really well if you were not able to watch the activity all day long.

And of course the sell strategy would be to follow the price increases with trailing stop loss orders (again, just below the trading range) to lock in profits.

Disadvantages? As long as the stops were set far enough out of the normal trading range for you not to get 'whipsawed', it sounds OK. I already know about the hazards of low-balling a buy order, which would be having the order get filled on downward MOMO (not from first-hand experience, thankfully). Decent chance of catching some upward MOMO on a stop-buy order? Additional comments would be appreciated.
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