Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : JDS Uniphase (JDSU) -- Ignore unavailable to you. Want to Upgrade?

To: Girish Patel who wrote (4142)	1/9/2000 3:13:00 PM
From: Kayaker	Read Replies (1) \| Respond to of 24042

Why not just follow the price with trailing stops? I think trailing stops are bad idea. I am among the paranoid who think the MMs routinely run down a stock to take out the stops and then back up it goes without you. It also ensures that you'll be sending a constant stream of tax dollars to the feds. Just my 1¼¢.

To: Girish Patel who wrote (4142)	1/9/2000 6:19:00 PM
From: Guy Gordon	Read Replies (2) \| Respond to of 24042

RE "Why not just follow the price with trailing stops?" I don't want to sell the stock. I have a 500% gain in JDSU. I want to hold it for years, and I don't want to pay capital gains taxes and only be able to buy back fewer shares. The idea is to get some protection from the downside without selling. There are (at least) two types of channel trading. You can buy at the bottom of the channel and sell at the top. This can be very profitable, but has problems. It generates lots of taxes. Also, you often don't get back in good stocks because they don't correct all the way back down to the bottom of the channel. Another way to channel trade is to buy stocks on a good uptrend and just hold them long term. The channel shows you when to buy (at the bottom) and when to sell (when it breaks through the bottom.) But there's a problem with this as well. Take JDSU as an example. Right now I would sell JDSU if it broke the 50-day MA (arround 123). But JDSU was at 190 Monday. That means I would have to eat a 70 point loss before selling. I don't really mind holding a good stock that goes down to the bottom of the channel and bounces. It's that last time where it goes down and doesn't come back up that I want to avoid. Selling covered calls at the top of the channel is one way to avoid that. Buying puts is another. And if I had the perfect answer to this problem I'd be rich and selling you books and weekend seminars on how to do it. :-)