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Pastimes : ASK Vendit Off Topic Questions -- Ignore unavailable to you. Want to Upgrade?

To: rx4pain who wrote (18789)	2/5/2001 4:02:14 AM
From: Walkingshadow	Respond to of 19374

rx4pain, Glad my post was helpful. Please note, however, that this is not a precise science by any means. That said, I think you have discovered exactly what I was hoping---that the indicator settings should be adjusted to fit the stock, and the only way to do this is by trying out various settings and seeing how well they fit the stock in question. You cannot simply blindly rely on one setting for all situations; though that may work for most cases, it can and will be very misleading for others. And, that you may want to use one setting to help time entries, but another to help time exits, in accordance with your trading style and tolerance for risk. You can also see by what you have been doing that using the daily stochastic alone to time entries and exits will work okay, but it will also lead to situations where you enter a stock after much of the upside, and exit after much of the downside, particularly with very volatile, explosively moving stocks. This will tend to lead to diminished overall returns and more losing trades, even though the technical indicators were correct. As you probably surmise, in these cases it is best to move to more "fine tuning" of entries and exits, and there are myriad ways to do so. One common one involves moving average crossover signals of various sorts, or intraday price relative to important intraday moving averages, particularly the 200 min ema. If you are interested, I could post some examples. But IMHO it is far more preferable to improve consistency of trades than it is to look for ways to get every last bit of profit out of a trade. << They also have me leaning towards not selling the puts yet as a crossover appears unlikely on Monday. >> I would agree with that. I think RIMM has more downside, and also with options you must shoot for higher profits because the losses on your losers tend to be far higher than the losses on losing stock trades. If you do not do so, and settle for, say, 20% profit on an option trade, and 3 out of 10 options trades for you are profitable, it will not be long before you are broke. This is simple mathematics, a byproduct of the fact that your losses are mounting up faster than your profits because they will be more frequent with options, and their magnitude will not infrequently tend to be 30% or more. If you have a relatively large position, I'd consider taking profits on half the position, and letting the other half of the position move more if it will. But if RIMM starts to move against you, then the closer the expiration month the sooner I'd pull the plug. You can always re-load and wait for another entry with RIMM. There will be many, you can be sure. JMVHO....... Walkingshadow