DAYTRADING Fundamentals Message Board

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Strategies & Market Trends : DAYTRADING Fundamentals

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To: David L. Carter who wrote (77)	6/6/1999 12:52:00 PM
From: Eric P	Read Replies (1) of 18137

David: Regarding stop loss placement. Assume that you enter a long position in WXYZ stock. Obviously, you have entered the position with the expectation that the stock was going to go higher. => Now, at what price would the stock need to fall to before you are convinced you that your analysis was wrong, or your timing was off? This is where I believe your stop should be placed. Note: You must decide the stop point before, or immediately after you enter a position. Otherwise, you are subject to the ugly 'stop drift' phenomenon, as you keep mentally adjusting where you think the stop should be for trade, never allowing it to be hit. -Eric

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