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Pastimes : Rules We Can Learn From -- Ignore unavailable to you. Want to Upgrade?

To: AugustWest who wrote (70)	4/27/1998 11:01:00 AM
From: mph	Respond to of 109

Rule: Listen to Jan and P& F indicators more. She called today's action some time ago! mph

To: AugustWest who wrote (70)	4/27/1998 12:06:00 PM
From: Ronin	Read Replies (1) \| Respond to of 109

Hi August, You are absolutely correct. I'll quote the paragraph from the book "49 Years in Wall Street" by WD Gann. Stop Loss Orders. "I feel that I cannot repeat too many times the value of using stop loss orders because it is the only safety valve to protect the investor and the trader. An investor or trader will place a stop loss order and one time out of ten the stop will be caught at the exact top or bottom. After this he always remembers that and says, "If I place a stop loss order, they will just go down and catch it, or just go up and catch it and then the market will go the other way." So he does not use the stop loss order the next time. His broker often tells him that stop loss orders are always caught. The trader forgets that nine times out of ten the stop loss order was right and would have prevented big losses by getting him out when the market was going against him. The one time that the stop loss order gets you out wrong it makes up for it in the next nine times that it gets you out right. So don't fail to use a stop loss order".<end> August, I think that you need to place the stop far enough away so that you don't get stopped out with normal market noise, But not too far that you end up with a devastating loss should you be wrong. I think that the main thought is, whether percentage or points, don't fail to use a stop. Ronin