Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Ask DrBob -- Ignore unavailable to you. Want to Upgrade?

To: FLACK who wrote (92346)	1/2/2006 10:22:52 PM
From: Jeff O'Brien	Read Replies (1) \| Respond to of 100058

Flack, I think exit strategies are necessary but are sometimes hard to put into action, and even harder to give hard and fast rules to another trader. But I'd be glad to have you go ahead and give some anyways <gg>. On Friday, I was doing a few daytrades of BRCM. It was doing a lot of bouncing around, but usually moved in about .20 ranges. Sometimes it would make quick bounces of .10 to .12 which can take you by surprise. At one point in the afternoon, it made a drop of .40 in about 15 secs., then gained about .15 back in another 15 sec. and later went on above the original spot and then closed on the plus side for the day. I guess a strict sell point would have got you out of the stock quicker and with less pain than a panic sell near the bottom, but you still end up seeing the relatively quick recovery and on to what would have been the gains you had been looking for all along. I also saw CWTR a few weeks ago trade down 10% during the morning (just a steady fall, not at the open), and then gain almost all of it back before the day ended. With hard and fast stop rules in, you end up selling the position, and watch it all come back and even higher the next few days. I guess my question is are these two situations oddities, or are we seeing this more and more in trading these days??? Thanks for any input. Jeff

To: FLACK who wrote (92346)	1/3/2006 1:54:08 PM
From: bcrafty	Read Replies (1) \| Respond to of 100058

FLACK, thanks for the post on exit strategies. I once asked you a similar question a couple of years ago, and your answer was exactly the same - it shows that you were doing something correct then, and you still are ;~). Like the market, your exits are "dynamic" and depend on many factors that may change from day to day. But on the issue of exits by people who are giving a particular recommendation, I was instead thinking more about stop-loss exits. I meant that I felt the writer should mention some kind of hard and fast "point of no return" type exit, such as "this pick is out the window if it falls below the support level of 26 from March" or "this pick is based on its current uptrend, so if it falls much below the weekly trendline from the October advance, I'd sell." Exits like this help to let the reader have a clearer idea of where the writer's coming from, and help to complete the picture of the particular trade. Even if the person making the recommendation is basing his pick on FA, he should have some kind of exit in mind. This type of picker usually looks for some kind of significant change in the company or the way it operates, such as a large decline in the sales of their superwidgets or whatever. But IMO those pickers should state some kind of standing rule on exits such as a percentage stop loss, even if it's a wide one like 25%. And the legal biz is doing great; thanks for asking. That's part of the reason I have little time to daytrade anymore. <g/ng>