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TerryA
14-03-2005, 08:29 AM
Could some of the experts give their opinions on the best method of actioning stop loss sell orders.

In particular does one;

a. wait until the close
b. work on the closing price as triggering the stop loss or any of the intra day trades
c. place the sell order "at market" for the following day or at the end of day offer price.

I trade on line and generally monitor my watch list twice a day, about 1 pm and then after the close.

Thanks in advance.

Phaedrus
14-03-2005, 11:44 AM
Terry,
You missed option d!
This is what I do - check a few minutes before the market closes, taking the latest price as the "Close". If, at that level, an exit is signalled (by a stop-loss or any other sell signal) I sell at market. I do take care though not to attempt trading with illiquid or thinly traded stocks. Don't cut it too fine - you may miss out if your broker is a bit slow. I find about 15 minutes gives a reasonable safety margin.
This way you only need to check the market once a day, but you are in a position to act, if need be.

TerryA
14-03-2005, 12:08 PM
Phaedrus,

Many thanks for this sage advice. I shall apply it and see how I get on.

Best wishes,

limegreen
14-03-2005, 02:00 PM
FWIW, I've sort of learnt this strategy myself. Phaedrus tipped me that I should chart close rather than OHLC. Since then, I've found it interesting the number of times the morning's action is either reversed, or no-where near the intial burst. In the past I've made some silly buys too soon after good news, only to find by close, the price is rather more settled. Spikes down certainly seem to be the same.

TerryA
14-03-2005, 02:22 PM
Limegreen,

Thank you.

It is just that sort of scenario that made me ask the question.

A second stop loss was triggered at 49c about midday and I sold At Market (45C) only to find that the close was bakc to 50 and has stayed there ever since.

I had also missed an earlier trend break and it eas the combination of these two events for the same stock that made me decide to buy Metastck and the EOD service.

Terry

PS what would we do without Phadreus ?

limegreen
14-03-2005, 04:21 PM
Something I have wondered about, however, is if there is a really really serious run, is whether a computer-triggered-and-actioned stop (ie, one done through your broker) set well off the action, would save a position in the extent of a huge sell-down. Or whether in those situations, there are so few buyers they'd be hopeless anyway.

Well, for now at least, my "stops" are next to my monitor, and I have a squizz on close.

zyreon
14-03-2005, 05:50 PM
in big leveraged speculative positions you should have protective puts (or calls if short).
know why? just look at ELN and BIIB 1 month chart (NYSE, NASDAQ).

stop loss wont help you at all in that kind of situation.

(note you're probably mostly safe in NZ from that kind of situation, but it pays to know a stop loss is only one of many risk management tools)

Dazza
20-03-2005, 05:00 PM
if too many of ur stop losses are triggered?
and then u buy again and then stop losses triggered again...

or u exited out due to timeline etc what duncan does..

wouldnt ird say 'ur a trader'

as if u had invested in the company for long term, shouldnt u be buying it up when its dipping?!

limegreen
21-03-2005, 12:44 PM
Dazza: Being a trader is about majority intention. However, assuming that your stops are not set tight, then it's very unlikely that they'll be triggered, so you won't be buying and selling very often, so you be so much at risk of being a trader. For example, I recently topped up on FBU. My stop is around $6.50, which would require a *Major* drop in the SP to trigger. Ie, pretty bloody unlikely.

Dazza
22-03-2005, 09:54 PM
could u enlighten me more , on ur avg buy price of FBU then?!

*it hit 7.07 on monday... hehehe *

limegreen
23-03-2005, 01:20 PM
My average buy price of FBU is $5.35. I recently topped up at $7.20, and it's been as low as as $6.90, but I'm not concerned. Obviously, I didnt' time my top-up perfectly, but even if I'd paid $7.50, I wouldn't be concerned.

Some things you might note on the following chart. The OBV is still in a solid uptrend (and still respecting the steeper of the two lines). You can fiddle round with longterm trend of the shareprice a bit, but not that not even September 11 took the price below the uptrend line. The RSI indicator has never shown FBU oversold. Thus, buying is best when it's about as far down as it gets, in this case where the red vertical lines are. I'm pretty happy with my timing on the whole. It's very very hard to pick the *exact* bottom.

http://img.photobucket.com/albums/v361/limegreenz/fbu23mar05.gif

Being an investor and not a trader, it's clear that selling FBU has *never* been a good idea. I'm not sure whether traders would have done better than a buy and hold.

Having purchased at $7.20, I set a stop-loss. 10% down would be about $6.48; The steeper unconfirmed trendline ias around $6.52, and the long-term trend and the 200 EMA are below that. I still think now represents a good buying opportunity.

Dazza
23-03-2005, 02:41 PM
yes agreed at 7.07 mark yesturday's close i tink
but do u tink the trains about to stop though...

limegreen
23-03-2005, 03:18 PM
The train could always be about to stop. There are other stocks that are showing far more sign of pulling into reverse that have a lot less going for them than FBU (For example, I think if we were to pick which stock one might easily loose 20-30% on in the near future, I'd be backing NOGOC over FBU. Oh wait, NOGOC did just retrace 70%, FBU would have to drop to $5.50 for that). I might be wrong, and loose a bit of money. That's life. I've lost a lot more than I may or may not loose on this investment.

That's not to say that NOGOC might not have more potential upside. It's also worth noting that people have been speculating about the train stopping for months now, and would have missed out on 30-40% gains if they'd already jumped off...

Dazza
23-03-2005, 06:59 PM
agree with u there limmie
i would have thought at $6 it would fall

boy was i stupid not to buy in aorund the 5.60 mark when it went ex-divy last time

limegreen
23-03-2005, 10:31 PM
quote: boy was i stupid not to buy in aorund the 5.60 mark when it went ex-divy last time

That's the main reason why I bought. I'm still learning at this too. I've learnt now that just because you've missed a big price movement probably just means they'll be further big price movement. That is, I'd rather buy more of a company like FBU, than buy something that is range-bound. However, another lesson that I've learnt lately is that even brilliant stocks pull back every now and then, and that's a smart time to buy without the sleepless nights. As I said, if I'd topped up at $7.60, I might be freaking, at $7.20, it's just a little random noise.

The question is, will you be, "boy was i stupid not to buy in around the $7 mark when it wen ex-divy last time" in 6 months. I think now is a time for caution, but FBU is solid, and it's still got a near single figure P/E. It's not an AIA or a WAM which while they've been doing well, could have a major SP movement, and end up with a more sensble looking P/E.

limegreen
01-04-2005, 12:53 PM
As an interesting aside to the main point, FTX today perhaps represents a good reason for the manual activation of stops. One would wonder if a broker would actually sell your shares at 30% below the previous days close. It would have clearly broken most sensible stops, but with that sort of drop, re-considering whether you want to sell would make sense, especially as the price is recovering (somewhat) this afternoon.

Snow Leopard
01-04-2005, 07:30 PM
quote:Originally posted by limegreen

Dazza: Being a trader is about majority intention. However, assuming that your stops are not set tight, then it's very unlikely that they'll be triggered, so you won't be buying and selling very often, so you be so much at risk of being a trader. For example, I recently topped up on FBU. My stop is around $6.50, which would require a *Major* drop in the SP to trigger. Ie, pretty bloody unlikely.

With the close today at $6.46 are you out? And if not will you exiting on Monday?

Dazza
01-04-2005, 11:23 PM
PT refer to the FBU thread, he answered my question which is the same as urs in there

man u guys do offer a good persuation to buy in eh, but im still sticking to aia or wam safer bets

this housing bubble talk thingie.. has really got its head around.. me...

limegreen
04-04-2005, 02:24 PM
PT. My final indicator, a 135 EMA is still unbroken (although it's had it's toe over the line). The DRiP is also making me consider holding off to Friday...

Daz. FBU do more than just houses, and I think FBU's spectacularly low PE (10ish) makes it safer from a profit downgrade than either AIA or WAM (20+).

DISC: FBU, WAM