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To: dli who wrote (4193)	11/10/2000 5:40:05 AM
From: Teresa Lo	Respond to of 8925

Dave, thanks for the help in explaining this...I did not articulate it very well to Jill, even thought I wrote an article on this: ispeculator.com Thanks! Teresa

To: dli who wrote (4193)	11/12/2000 10:15:02 PM
From: Tatnic	Respond to of 8925

>>>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 <<<<< Good post Dave, but I think a 2:1 reward:risk ratio is more conservative as is a 1% maximum risk. Something to ponder.