If you're doing swing/short-term trades based on technicals, I have a question for you: given that these stocks are long term buy and hold worthy, how do you manage stop losses? Or no stops at all, just hold hoping for long term gains?
I'm not a trader. Stop loss orders are a trader's tool which is not good for buy and hold stocks, specially not for the high volatility NPI stocks. My broker used to recommend "mental" stop orders in lieu of real stop orders.When a stop loss order reaches the stop price it becomes a market order and it can execute way below the stop price. If it was FUD the stock will bounce back and you have a huge loss. There is also the stop limit order which will trigger at the stop price and become a limit order. Often these don't execute when there is a steep drop.If you are truly scared out of a stock, just sell it. Better yet, learn to control your emotions, our fight or fight instinct was developed to deal with survival in the African savannah, not on Wall Street! ;)Since the start of the Tweeter presidency our NPI stocks have seesawed like crazy. Great for trading options but hard on longterm investors who watch prices daily.Denny Schlesinger
Thanks Denny, I agree that mental stops are better. So you seem to be saying to weather the price drops in anticipation of long-term gains?Also, is there an interface/tool that'll show multiple stock charts with a particular indicator (Eg BB, MA, etc) in the same tab? Or any preferred tools for doing TA? Stockcharts.com and similar only seem to show one stock at a time and with limited past data (unless it's different for members?)
with limited past dataYou can adjust the range by manipulating the fields below the chart. You can put in dates manually to go back as far as you want, as well.
Stockcharts is happy to display multiple stocks and gobs of history on their performance charts.
If you are really going to do technical short term trading, then you should have an entry and exit strategy going into every trade, with contingency plans for what you are going to do if the price goes up and what you are going to do if the price goes down. If you are just winging it day by day, you are going to end up in trouble at some point. A great comparison someone gave on another board years ago was to a baseball fielder, where you don't necessarily know where the ball is going to get hit. You may have an idea of probabilities, but you have to have a plan in mind of what base you need to cover or throw to depending on where and how the ball is hit.Traders use stops to keep losses small, and to protect gains when you have them. Yes, you will get stopped out early sometimes, but that is part of the deal. A big loss is a lot to try to recover from.
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