Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Befriend the Trend Trading -- Ignore unavailable to you. Want to Upgrade?

To: Ken Adams who wrote (2542)	1/3/1999 3:30:00 PM
From: drsvelte	Respond to of 39683

Out of curiosity, how long do you usually stay with a position, and do you use stops to take you out? This is what I prefer. I have been using a rather arbitrary 5% gain and then out. Because I don't really know the stock or the fundamentals, my strategy has been to minimize my exposure. Plus, I've had my stops run when I've used them and placed them to tight. However, with my current strategy, I have been losing out on some upward movement after my exit. For example, I went long on ISSX in mid-December at 39, got out at 41 1/2. ISSX is trading around 55 now! So I am re-evaluating stops -- I am currently long TER, LIN, NCR with stop losses in place. FWIW, trades I am looking at for tomorrow: TMPW,RE,MRBX,CBXC. I also like CMNT on the pull-back. Critique invited! I hope the small cap rally keeps going!

To: Ken Adams who wrote (2542)	1/3/1999 5:12:00 PM
From: Dr. Stoxx	Read Replies (2) \| Respond to of 39683

Ken (and dsv), Like you, I am beginning to be more wary of relying too heavily on Stochastics for entries and exits. It is a trend-leading indicator, but is often premature. I am trying to erase from my thinking the idea that 75+ means overbought and 25- means over sold. These areas simply signify the strength (75 on uptrends/25 on downtrends) or weakness (75 on downtrends/25 on uptrends) of the present trend. They are not very good at predicting trend reversals, and are all-too-good at following false breakouts. With you I am also becoming a fan of OBV. MACD for sure, and perhaps RSI as well into the mix. The key is to find divergence, which indicates weakness, which we can exploit (so we can "fade" false breakouts, and capture key reversals). But mostly I seem to be looking most longly at price pattens and trendlines. If its not happening on the chart, it doesn't matter what the indicators say. It's not going to be happening in your account! PS: on stop losses. I am using them again, after going for a while with "mental" stops. Elder suggest 2% max per trade, based on one's total account (e.g.: $25k account = $500 max @ risk), and set your stops according to trendlines (just above/below support/resistance). If the trendline is too far away, and forces more than a 2% risk, then abandon the trade. It's too risky. I still like 8% per trade rule, but I may try Elder's suggestion. There are also indicator stops (sell when Stochastics cross, or MACD turns down, etc.). TC.