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To: pz who wrote (16388)	9/18/1998 8:31:00 PM
From: Ron McKinnon	Read Replies (1) \| Respond to of 53068

stops easy question, difficult to answer where to set them depends let's assume the F/A checks out, otherwise no stop, just sell next look at various types of T/A to get a solid feel for support areas for a long term core stock with say a 2-5 year expected holding period, maybe set it at the 200-90 day moving average? or just under logical support for 6 month to 2 year holds, 90-60 day moving average, or just under logical support for 2 week to 3 months, 30-15 day ma, or just under logical support if a stock is getting very close to resistance or your price target maybe a tick under yesterdays low if you are thinking of selling maybe 1/8-1/4 under the current bid I'd rather set the stop at a logical price but many say set it at -15% from your buy price I'm more inclined to set it at about -8% or so if that price makes any sense if you are up on a stock set it a tick or so above your entry, never let a profit turn into a loss never lose more than 2% of your total equity on any one stock, so set accordingly, if 2% is not near logical support then set the stop higher, or don't buy the stock ---------------------------- >>The question is why are we so hard headed as to not use them, and I'm the world's worst. easy answer because of the word hope combined with the inability to admit a mistake --------------------------- >>>So as you have said previously, set MENTAL stops on NASDAQ stocks, because the mm's screw you, but set REAL stops on NYSE and AMEX stocks a lot of people will screw you (except those you want to do so ggg) many brokers will not take stops on 4 letter stocks those that do vary the trigger between a bid hit or a print but a stop always becomes a market order when triggered, and market orders are death especially on the nasdaq ------------------------------------------ a good way to get in the habit of using stops is to pick the sell stop price before you buy (if you can not find a sensible stop price don't buy) and then put one in the instant your buy order is filled, try that on your next 10 buys PS do as I say and not as I do and you will find your losses will diminish over time

To: pz who wrote (16388)	9/18/1998 9:20:00 PM
From: Susan Saline	Read Replies (2) \| Respond to of 53068

STOPS this is one of my favorites ... if only I followed it ... I would be a lot better off too .... To: +Coyoti (2379 ) From: +Coyoti Saturday, Jan 24 1998 4:55PM ET Reply # of 3625 Stop Losses& Risk I've heard a lot of confusion lately from new traders regarding stop-losses...many of the new investing books recommend 8-10%; you must remember this is for INVESTOR's, not traders. What i have been using with good success is a formula put forth by Dr. Alexander Elder in his excellent book, "Trading for a living" where he suggests that you limit your losses to 1-2% of your entire trading stake, before margin, PER TRADE. If you keep to this formula, your portfolio can take the inevitable string of hits without serious damage. So if your trading w/$10,000 capital, the largest hit you can take is two hundred bucks, including commission. This naturally brings up the size of your position in relation to your stop loss. You must decide whether to limit your losses consistantly to an eighth, and hence trade larger positions, with a willingness to re-enter the trade; or build in your tolerance for Market noise (normal price fluctuations, or MM's shaking the tree) by taking smaller positions, with say a half point stop-loss built in. Another point on stop-losses: they must be mental, if your trading Nasdaq; if you place a physical stop-loss, a MM will drop his price for an instant to trigger your stop, and steal your money...guaranteed. On a losing streak? A good practice is to quit trading for a day or two and paper trade if you take three hits in a row; if you're down 8-10%, quit for the month and stick to paper trading the rest of the month. Beware of overtrading: if you're up a point or two for the day...take the rest of the day off! Get away from the screen...go play. I have found myself overtrading after making some good plays....and i get over confident and take on more risk than i normally would, and would have fared much better if i had quit while i was ahead. For some reason, often we find a reason to gamble instead of trade when we're up, with the rationale that it's ok to put the money you just made at risk. Thats a losers headset over time. A nice trick is to try cutting your number of trades in half for a week... you may be surprised at the results. If you are patient and very selective in your trades, your odd's and confidence increase dramatically. If you cannot wait patiently for the market to offer a solid play, and/or are trading for the rush...you probably should not be trading. In a macabre, but what i think to be an accurate analogy: govenment statistics show that during the Vietnam war, American infantry burnt up 200,000 rounds to get a single body count....whereas the trained sniper averaged 1.3 bullets per kill. Hope this helps someone. -Coyoti

To: pz who wrote (16388)	9/18/1998 11:03:00 PM
From: voodooist	Read Replies (1) \| Respond to of 53068

Pz, as a full time mostly lurker on this thread I'd like to add my two cents regarding why some of us (GGG) don't set stops as we know we should. Perhaps I speak for some of the other bottomdwellers who reside here, as well. When a bottomdweller buys a stock at what he is convinced is rockbottom, he believes that it can't possibly go down, but that if it does, he will double up and double up and double up. For instance, if he had bought IRF at 4 1/4 (GGG) would he sell if it dropped? Certainly not!! He would double up. Now if he had five other positions all acting the same way, he might forget about doubling up even if had the cash, but how could he possibly sell a stock like IRF at under 4 1/4? He'd have to be nuts. While I wasn't brave enough to buy IRF at that price, I think the psychology I have described might possibly apply to others as well. The next problem is to avoid selling to get even, which is even a bigger sin. P.S. I use IRF for my description only because I know that it is known to this thread. I think it's a steal here (only it's trading like a steel).