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Strategies & Market Trends : Strictly Buy and Sell Set Ups -- Ignore unavailable to you. Want to Upgrade?

To: kodiak_bull who wrote (2122)	2/4/2005 5:04:26 PM
From: chowder	Read Replies (1) \| Respond to of 13449

>>> Most traders think of stops relating to their exit of a position, but I'm finding these days that one of my most preferred entry techniques also involves a stop. A stop order to buy (or 'buy stop') becomes a market order when the option contract trades or is bid at or above the stop price. <<< I use the buy stop almost exclusively on all of my trades. It's also a great tool for those who can't sit in front of the computer all day. With the way my trades are played, the price has to move up above the previous day's high of the day for me to buy. This insures upside momentum. The buy stop order is great for this. I can even take a nap and come back and see that I am in the trade at the price I wanted. Another great feature of the buy stop is that a lot of technicians are looking at the same price to enter. As the price gets close, everyone is watching and waiting. I've seen price come within a penny of the entry chart and stall. My approach is to "make the chart." I've seen many times where the price jumped as the entry target was hit. The technicians started entering their orders as the price hit the entry target of those seeing the same thing. In short term trading, it's important to get your price because you don't have much room to work with. One can't go chasing after a stock once it starts to run. The reward to risk ratio changes dramatically if you enter too high. Again, this is where the buy stop comes to the rescue. dabum