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Strategies & Market Trends : You buy a stock. It goes down, now what? -- Ignore unavailable to you. Want to Upgrade?


To: The Ox who wrote (18)7/7/1998 4:27:00 PM
From: Investor2  Read Replies (1) | Respond to of 112
 
Good point. Does this mean that the standard deviation of the price could/should be used to develop a stop loss? Perhaps a multiple of the standard deviation.

But wait, the standard deviation of prices varies with time (i.e., there are periods of low volatility when the standard deviation is lower). A formula based on standard deviation would then result in a closer stop loss during periods of low volatility. I guess that's good.

What do you think?

I2



To: The Ox who wrote (18)7/8/1998 4:56:00 PM
From: PaddyD  Read Replies (3) | Respond to of 112
 
In January of 1996 I bought 1000 shares of RTI at 11 with a stop loss at 10. The next day the broker called and told me it sold at 9. By the end of the day the stock closed at 11. That cured me from placing stop loss orders. Comments welcome.