Stop Loss Orders And Where To Place Them

Written by John B Keown


Continued from page 1

Since we are generally longer-term investors, we use 1 or 2, or a combination of both such as 1 forrepparttar initial stop, and then 2 forrepparttar 148014 trailing stop oncerepparttar 148015 position has moved significantly into profit. Just use what you feel most comfortable with.

According to William O'Neill of CANSLIM and Investor's Business Daily fame, a stop of 8% is more than adequate. However, be aware ofrepparttar 148016 different volatility of particular stocks and use your judgement. Also make sure at least that your initial stop is further away fromrepparttar 148017 price. Experiment, and discover your own tolerance for risk.

An unusual system for placing stops I had some success with was to userepparttar 148018 long-term average S&P annual gain of 11% and multiply it byrepparttar 148019 stock's beta, ifrepparttar 148020 beta is greater than 1. Round this number up or down. Simplistic but effective. If a stock has a beta less than 1, just use 11%. CRDN has, as of 07/07, a beta of 1.307. The stop, if we were buying today would be 11*1.307 or 14%.

14% my seem like a lot to lose, ifrepparttar 148021 stock falls after you buy it and hitsrepparttar 148022 stop; in a diverse portfolio, this will not happen too often and you will be protected from having to make a 100% gain to break even. Most discount brokerages allow percentage trailing stops nowadays, and may not even charge for them, giving you peace of mind for free.

(c) 2005 The Graham Investor - Value Investing You may use this article, as-is, provided this copyright notice is kept intact.

John B. Keown is an IT specialist, website builder and private investor who enjoys all things stock-related and in particular seeking out undervalued stocks. He can be contacted via http://www.grahaminvestor.com


5 Day Trading Tips for Success

Written by Mike Reed


Continued from page 1

"Major Time of Day"- Aroundrepparttar 2:20pm to 2:40pm time frame, we'll often see moves reverse or gather steam in that timeframe. People that have been holding positions all day long become a bit "antsy" - they have to do something with them beforerepparttar 148013 Market closes forrepparttar 148014 day. When people holding losing positions into late intorepparttar 148015 day seerepparttar 148016 time untilrepparttar 148017 close is near, that can causerepparttar 148018 market to make some sharp turns inrepparttar 148019 last 90 minutes. The program gang also likes to get active that time of day.

4. How Can Anyone Trade a Choppy Market?

I take a number of scalps in choppy markets. I time entries with Tick extremes, especially when price pops into previous high areas of congestion, or other intraday support and resistance. Moving averages are not good during choppy days.(Scalps : small profit, "hit and run" type of trades)

5. How Do You Measure Pullbacks?

In a trend move, I like to see shallow pullbacks to a steeply sloped moving average on one ofrepparttar 148020 3 time frames I follow. (more time frames,repparttar 148021 better) Pullbacks to symmetry in a persistent trend are useful when present.

Example: Rally, dip 2.00 points Another run up, then a dip of 2.25 points A another push higher, then a dip 1.75 points. Note continued dips of 1.75-2.25 points repeatedly hold. A pattern has developed, and you want to be buying those shallow pullbacks. This works great used in conjunction with a steep slope ofrepparttar 148022 20 ema onrepparttar 148023 5 minutes charts, or slightly bigger picture,repparttar 148024 60 ema onrepparttar 148025 5 minute chart.

Mike Reed author of TradeStalker's RBI Trader's Updates. Mike has been trading the Market for 23 years. Mike's support and resistance numbers have been published on the internet since 1996. Mike's nightly support and resistance zones are specific and incredibly accurate. He offers an unlimited free trial of his nightly TradeStalker RBI Trader's Updates. http://www.TradeStalker.com


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