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Politics : High Tolerance Plasticity -- Ignore unavailable to you. Want to Upgrade?

To: pls418 who wrote (12816)	3/8/2002 8:58:58 PM
From: chowder	Read Replies (1) \| Respond to of 23153

Steve, my stops are mental stops. You don't play cards showing your opponent your hand, why show the MM your hand when he's the one that manipulates the deck? When using TA, intraday moves are rarely taken into consideration. It's the open and close that I focus on. To do this you need to be a little flexible. If you see you're coming up against a resistance level, go ahead and sell, lock in your profit and wait to see what the price is going to do. If it breaks resistance on strong volume, go ahead and buy back. You haven't lost much for the insurance of protecting yourself since about 80% of stocks pullback at resistance. If it pulls back as expected, set your price and go with the flow. Being flexible and open minded is critical. Work in the opposite direction from the support level. dabum

To: pls418 who wrote (12816)	3/8/2002 11:11:57 PM
From: RWS	Read Replies (2) \| Respond to of 23153

Regarding stops, here's my system in brief. Look for a stock that is pivoting into a trend and work to get a good price and timing on entry. But assume that there is a 50% chance the trade will go against you. There is no sure thing. Decide how much of your portfolio you're comfortable risking on the trade. For me its usually 1% max. So if your capital is $500,000 you'll risk $5000 on a good idea. Look at the stock's volatility (average true range)over some period. I like 13 days. For example, today HAL's 13day ATR is $0.80. You want an initial worst case and trailing worst case stop at some multiple of HAL's volatility. Some studies show that if a stock moves against you by more than 2.5 ATR, then you calculated/figgered/was told/guessed wrong. So you choose, for example, a 3 ATR stop, which for HAL is $2.40. You enter HAL by purchasing 2,000 shares ($5,000/$2.40)at $17.25 with a stop at $14.85. Move the stop up by 3 ATR as price rises, only changing the ATR if it gets smaller. You know you're out of range of a normal pullback and comfortable if your stop is hit that you aren't going to get killed. You can add stops, eg if your profit is double the $5000 you risked or some other goal, tighten the stop to 1.5ATR. As far as discipline with mental stops, I trained myself to look forward to my stop getting hit so I would have some cash for another good idea. If you had a chance to look at my charts at groups.yahoo.com, after the stock starts moving in my direction, I use the Andrews' pitchfork trendlines to set stops and sell targets. RWS