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To: Jill who wrote (4125)	11/9/2000 1:29:47 PM
From: Teresa Lo	Respond to of 8925

You'll get a ton of stuff in the email that will keep you busy all weekend. And don't worry, you'll learn a lot, and you'll see why putting stops "just under an old low" and "just above an old high" is not a good thing. Teresa

To: Jill who wrote (4125)	11/9/2000 10:25:08 PM
From: dli	Read Replies (2) \| Respond to of 8925

When you say: That's WAY TOO MUCH rope, and why the 2B tests always nails 'em you mean that if someone buys on a dip with a 20% stop loss, they may be nailed on a retest of a double bottom? Or? IMHO placement of a stop should make sense technically but most importantly has to be assessed in relation to the reward you expected from the trade (risk/reward ratio). With the exception of very high probability methods like scalping I would not take a trade that does not offer at least a 2:1 preferably 3:1 risk/reward ratio. So to justify a 20% stop you would have to expect a 40%-60% gain and statistically such big calls don't have a very high success rate. In addition you would probably have to trade it in minuscule size since the size of your stop should be the primary factor in determining your position size so that your maximum risk does not exceed 2%-3% of your trading capital. Dave