January 5, 2008
Arbitrary But Consistent (ABC) Stop Management (Part IV)
Another ugly day in the market which means another pretty day for the IWO short. Price has now fallen six times (6x) the initial risk and has formed another “down” bar on the daily. I suggest moving the stop to above the high of this down bar at 80.73.
Assuming you risked $500 on this trade, you’d now be sitting on about $2700 of paper gains, and would have locked in around $2080 of that gain using this new stop level. This trade, like other recent short ideas (LINTA, LLTC, etc.), has turned into a big winner and I hope some of the many hundreds of people enjoying the free trial period caught it.
Arbitrary But Consistent (ABC) Stop Management (Part III)
Arbitrary But Consistent (ABC) Stop Management (Part II)
Arbitrary But Consistent (ABC) Stop Management
January 7th, 2008 at 6:36 am
I’m wondering how you might look at stop placement when a stock like LOGI drops $2.24 in one day with not much buy back until after hours. Would you keep it at the initial BE ($35.94) assuming that it will bounce Monday or move it down more aggressively?
January 7th, 2008 at 8:32 am
Bob: Good question, since LOGI dropped more than 4x the initial risk in one bang, I think being more aggressive about moving the stop down is possible, but for my record keeping purposes, I’ve simple moved the stop to above the high of the down bar at 36.24. People have to use a lot of judgment on how to manage these since I have no great confidence about knowing the ideal way to trail a stop (or even if there is an ideal way).
March 7th, 2008 at 11:19 am
The bar with high of 80.73 does have a lower high and lower low than the previous bar.
But not sure how consistent your definition of a down bar is.