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Strategies & Market Trends : Technical Analysis - Beginners -- Ignore unavailable to you. Want to Upgrade?

To: shasta23 who wrote (7606)	1/7/1998 7:14:00 AM
From: David R. Evans	Read Replies (2) \| Respond to of 12039

Hello Stefan, Keep those questions coming because they are GREAT!!!!!! If you have any doubts about the Market or feel the least bit unsure USE HARD STOPS!!! There is nothing wrong with putting physical stops in and there have been times when I wish I had them in. I do not suggest you give up more then 10% in any trade BUT the stops used by WOW and MSWIN in their System Test do not work the way I would use them. I use stops against the highest high since I've been in the trade (as long as it's a profit). MSWIN would have it against the profit... Example: I buy stock A at $30 and now it's at $40. I would have a stop (either physical/hard or mental) at 10% below $40 or $36. MSWIN would have the stop at 10% of the $10 profit or $39. There is a very big difference and the system test would not reflect the right scenario. That's why Richard and I always say run the system test without stops to get a better idea of what the indicators are trying to do. Your second point is a very good one and the one true shortcomings of StochRSI (or any other oscillator for that matter). You will miss many trades because of StochRSI just missing the 30 or 70 lines. That's why we say to fill your database with GOOD stocks so when you miss one you will find another. That brings up a point I want to make. When you are looking to buy stocks PLEASE do not fall in love with them. You are not marrying them. you are just going out for a cup of coffee. In most cases I do not even know the name of the stocks I buy never mind what they do!!! I just know the symbol.... I do not want to know anything else because I only want to trade THE CHART, not what I THINK might happen.. The less I know about a company the less I will THINK what will happen. I have to get ready to go to the Office now so I'll get back to you on your other questions.. Dave Evans