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

To: Investor2 who wrote (81)	7/20/1998 1:05:00 PM
From: P.T.Burnem	Read Replies (2) \| Respond to of 112

1. How do you "determine the nearest support level?" Never mind the moving averages. The market does not care about these, and neither should you. Take a look at the 5/15/30/60 charts and you will see zones of congestion, trading ranges, etc. The day's low (after 10-11am) frequently offers a good level of support. 2. How far below that support do you set your stop-loss? With most stocks, it's 1/16. With "expensive" (100/share and up)stocks, I may use the current price rounded down to $1 minus 1/4. I.e., if I buy a stock at 113 1/2, I'd put a stop-loss at 112 3/4. Overall, I try to place my stop loss within (1% + ask - bid) of the purchase price. Another word, if I pay the ask, I try to place a stop-loss order at or above (the bid times 0.99). PTB