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Strategies & Market Trends : MDA - Market Direction Analysis -- Ignore unavailable to you. Want to Upgrade?

To: Jon Tara who wrote (83855)	6/1/2003 3:04:14 PM
From: Tom Pulley	Read Replies (2) \| Respond to of 99985

Jon, that is a real good question looking at recent results! Actually in back testing the model I've found it is better to stick with the model and not use stop losses. Quite often stop losses would have taken me out of positions that ultimately are winning trades or lose less than the stop loss would have achieved. However, I strongly believe that folks who are trading individual stocks rather than an index should use stop losses. Individual stocks can make much bigger moves than the market. For instance, my initial short position of March 20th in qqq is now down about 11%. Had I taken a short position in one of the weaker stocks in the Nasdaq at that time such as NVDA,BRCM, or many others I would have already lost 35-50% instead of 11%. So, I do believe in stop losses on individual stocks but not on my model which trades qqq. Tom