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.

Gold/Mining/Energy : Position Trading in Canada -- Ignore unavailable to you. Want to Upgrade?

To: Wizzer who wrote (1219)	6/3/1999 3:13:00 PM
From: keith massey	Read Replies (1) \| Respond to of 2259

Wizzer...I am now holding 2K of AAH. If I stopped out at $4.80 that would mean a $1400 loss compared to selling it at the bid right now. I consider at $1400 loss a loose stop in my books. However it is not really a "loss" since the shares have a cost of $4.65 on my books right now. So if I got stopped out I would break even with commission covered. I often use this approach when I think the stock has peak and "may" pull back and run again. If I sold all of it at what I thought was the peak and I am wrong I would be pissed. If I use a tight following stop loss I could get kicked out on the pull back with only a little bit of profit. By using the sell half approach you get the best of both worlds. Now on the other hand...when I first buy a stock I usually set a stop that I lose a max. of $500. The risk reward must be at least 3:1 for me to enter a trade in the first place. So if I am willing to lose $500 I better be going in think I should be able to make at least $1500 or more on the trade. This approach works for all dollar values and stops. So if you are trading smaller amounts and set you stop at a $200 max. loss you shouldn't be going in unless you think you will make at least $600. Even if you get stopped out every second time...if you actually make your 3:1 or more on every second trade you come out way ahead. Hope this helps Best Regards KEITH